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Monetary Policy Credibility and the Unemployment-Inflation Tradeoff Some Evidence From 17 Industrial Countries

Using data on long-term interest rates for 17 industrial countries, this paper develops some simple measures of monetary policy credibility and then tests if such measures improve the out-of-sample forecasts of conventional models of the inflation-unemployment process. The results provide some evide...

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Bibliographic Details
Main Author: N'Diaye, Papa
Other Authors: Laxton, Douglas
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2002
Series:IMF Working Papers
Subjects:
Price Level
Interest Rates
Labor
Interest Rates: Determination, Term Structure, And Effects
Long Term Interest Rates
Banks And Banking
Inflation
Prices
Deflation
Financial Services
Unemployment
Unemployment: Models, Duration, Incidence, And Job Search
Money And Monetary Policy
Labour
Model Construction And Estimation
Income Economics
Monetary Policy
Inflation Targeting
Macroeconomics
Finance
Monetary Economics
Real Interest Rates
United Kingdom
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:Using data on long-term interest rates for 17 industrial countries, this paper develops some simple measures of monetary policy credibility and then tests if such measures improve the out-of-sample forecasts of conventional models of the inflation-unemployment process. The results provide some evidence in favor of the Lucas critique by showing that the short-run unemployment-inflation trade-off tends to improve in countries that are successful in providing low and stable inflation
Physical Description:39 pages
ISBN:9781451875218

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