Asymmetric expectation effects of regime shifts and the great moderation
By: Zheng Liu, Daniel F. Waggoner, and Tao Zha
Contributors: Waggoner, Daniel F.; Zha, Tao; Federal Reserve Bank of Atlanta
Series: Working paper series / Federal Reserve Bank of Atlanta -- 2007-23; Working paper series (Federal Reserve Bank of Atlanta : Online) -- 2007-23.
Publisher: Federal Reserve Bank of Atlanta
Published: 2007
Place of publication: Atlanta, Ga.]
Language: eng
Format: [electronic resource] /
Description: "The possibility of regime shifts in monetary policy can have important effects on rational agents' expectation formation and equilibrium dynamics.  In a dynamic stochastic general equilibrium model where the monetary policy rule switches between a dovish regime that accommodates inflation and a hawkish regime that stabilizes inflation, the expectation effect is asymmetric across regimes.  Such an asymmetric effect makes it difficult but still possible to generate substantial reductions in the volatilities of inflation and output as the monetary policy switches from the dovish regime to the hawkish one"--Federal Reserve Bank of Atlanta web site.
Notes: Title from PDF file as viewed on 10/29/2007.

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