New Economy--New Policy Rules? (ICPSR 1244)

Version Date: Oct 31, 2001

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Principal Investigator(s):
James B. Bullard, Federal Reserve Bank of St. Louis; Eric Schaling, Federal Reserve Bank of St. Louis

https://doi.org/10.3886/ICPSR01244.v1

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Summary

The United States economy appears to have experienced a pronounced shift toward higher productivity over the last five years or so. To understand the implications of such shifts for the structure of optimal monetary policy rules in simple dynamic economies, the authors begin with a standard economy in which a version of the Taylor rule constitutes the optimal monetary policy for a given inflation target and a given level of productivity. They augment this model with regime switching in productivity and calculate the optimal monetary policy rule in the altered environment. The authors find that, in the altered environment, a rule that incorporates leading indicators about regimes significantly outperforms the Taylor rule. They use this result to comment on the "new economy" events of the 1990s and the "stagflation" events of the 1970s from the perspective of their model.

Citation

Bullard, James B., and Schaling, Eric. New Economy--New Policy Rules? Inter-university Consortium for Political and Social Research [distributor], 2001-10-31. https://doi.org/10.3886/ICPSR01244.v1

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Inter-university Consortium for Political and Social Research
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Data Collection Notes

  1. The file submitted is 0109jb.zip, containing data and programs. These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.

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Original Release Date

2001-10-31

Version History

2018-02-15 The citation of this study may have changed due to the new version control system that has been implemented. The previous citation was:
  • Bullard, James B., and Eric Schaling. New Economy--New Policy Rules?. ICPSR01244-v1. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2001-10-31. http://doi.org/10.3886/ICPSR01244.v1
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Notes

  • These data are flagged as replication datasets and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.

  • The public-use data files in this collection are available for access by the general public. Access does not require affiliation with an ICPSR member institution.