Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
964471 | Journal of International Money and Finance | 2008 | 14 Pages |
Abstract
We assess the stability of open-economy backward-looking Phillips curves estimated over two different exchange rate regimes. We calibrate a new-Keynesian monetary policy model and employ it for producing artificial data. A monetary policy break replicating the move from a Target-Zone regime to a Free-Floating regime implemented in Sweden in 1992 is modeled. We employ two different, plausibly calibrated Taylor rules to describe the Swedish monetary policy conduct, and fit a reduced-form Phillips curve to the artificial data. While not rejecting the statistical relevance of the Lucas critique, we find that its economic importance does not seem to be overwhelming.
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Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Efrem Castelnuovo,