title: Explaining Inflation-Gap Persistence by a Time-Varying Taylor Rule
creator: Conrad, Christian
creator: Eife, Thomas A.
subject: ddc-330
subject: 330 Economics
description: In a simple New Keynesian model, we derive a closed form solution for the inflation-gap persistence parameter as a function of the policy weights in the central bank’s Taylor rule. By estimating the time-varying weights that the FED attaches to inflation and the output gap, we show that the empirically observed changes in U.S. inflation-gap persistence during the period 1975 to 2010 can be well explained by changes in the conduct of monetary policy. Our findings are in line with Benati’s (2008) view that inflation persistence should not be considered a structural parameter in the sense of Lucas. 
date: 2012
type: Working paper
type: info:eu-repo/semantics/workingPaper
type: NonPeerReviewed
format: application/pdf
identifier: https://archiv.ub.uni-heidelberg.de/volltextserverhttps://archiv.ub.uni-heidelberg.de/volltextserver/13117/1/Conrad_Eife_2012_dp521.pdf
identifier: DOI:10.11588/heidok.00013117
identifier: urn:nbn:de:bsz:16-opus-131170
identifier:   Conrad, Christian ; Eife, Thomas A.  (2012) Explaining Inflation-Gap Persistence by a Time-Varying Taylor Rule.  [Working paper]     
relation: https://archiv.ub.uni-heidelberg.de/volltextserver/13117/
rights: info:eu-repo/semantics/openAccess
rights: http://archiv.ub.uni-heidelberg.de/volltextserver/help/license_urhg.html
language: eng