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- Title
Inflation Measure, Taylor Rules, and the Greenspan-Bernanke Years.
- Authors
Mehra, Yash P.; Sawhney, Bansi
- Abstract
The article examines the measure of inflation used in estimating Taylor rules for monetary policy action. It was found that a time-varying measure of core inflation yields reasonable estimates of inflation while the headline consumer price inflation (CPI) does not provide reasonable estimates of policy response. Inflation measured by headline CPI is higher than core personal consumption expenditures (PCE). There is a need to employ real-time information for evaluating monetary policy action.
- Subjects
PRICE inflation; CIRCULAR velocity of money; TAYLOR'S rule; MONETARY policy; CONSUMER price indexes; CONSUMPTION (Economics)
- Publication
Economic Quarterly (10697225), 2010, Vol 96, Issue 2, p123
- ISSN
1069-7225
- Publication type
Article