A new look at historical monetary policy (and the great inflation) through the lens of a persistence-dependent policy rule
通过一种新的计量方法，将美联储政策反应函数中的失业率和通胀时间序列分解为持续性成分，发现美联储对大通胀时期的通胀态度从不愿应对到沃尔克时期后显著加强，支持了“不愿应对通胀”的观点。
Abstract The origins of the Great Inflation, a central 20th-century U.S. macroeconomic event, remain contested. Prominent explanations are poor inflation forecasts or inaccurate output gap measurement. An alternative view is that the Federal Open Market Committee (FOMC) was unwilling to fight inflation, perhaps due to political pressures. Here, we sort this out via a novel econometric approach, disaggregating the real-time unemployment and inflation time series entering the FOMC historical policy reaction-function into persistence components, using one-sided Fourier filtering; this implicitly estimates the unemployment gap in actual use. We find compelling evidence for (economically interpretable) persistence-dependence in both variables. Furthermore, our results support the “unwilling to fight” view: the FOMC’s unemployment gap responses were essentially unchanged pre- and post-Volcker, while its inflation responses sharpened markedly starting with Volcker.