The Dynamics of US Inflation: Can Monetary Policy Explain the Changes?

  • Authors: Filippo Ferroni and Fabio Canova.
  • BSE Working Paper: 471 | September 15
  • Keywords: New Keynesian model , monetary policy , Bayesian methods , Inflation dynamics
  • JEL codes: E52, E47, C53
  • New Keynesian model
  • monetary policy
  • Bayesian methods
  • Inflation dynamics

Abstract

We investigate the relationship between monetary policy and inflation dynamics in the US using a medium scale structural model. The specification is estimated with Bayesian techniques and fits the data reasonably well. Policy shocks account for a part of the decline in inflation volatility

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