Article ID Journal Published Year Pages File Type
5054782 Economic Modelling 2013 11 Pages PDF
Abstract
► We examine the US forward-looking monetary policy rule with the stock price gap. ► Introducing nonlinearity and a structural break alleviates the robustness problem. ► Time-varying pattern indicates the Fed's active response to inflationary pressures. ► The Fed's preemptive response to a stock price bubble is not supported.
Keywords
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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Nonlinearity and structural breaks in monetary policy rules with stock prices
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