4.3 Article

Fed's monetary policy mistake and the US post-COVID economic recovery

期刊

JOURNAL OF POLICY MODELING
卷 45, 期 3, 页码 669-676

出版社

ELSEVIER SCIENCE INC
DOI: 10.1016/j.jpolmod.2023.05.004

关键词

Monetary policy; Central banking; Federal Reserve System; Output gap; Full employment; Inflation

向作者/读者索取更多资源

This paper argues that the persistent inflation in the U.S. during the post-COVID economic recovery was mainly the result of the Fed's policy mistake caused by an overestimation of the negative output gap. The paper shows that the U.S. economy quickly rebounded and outpaced its potential output, thus remaining in overheating territory. However, policymakers prolonged the monetary expansion beyond the necessary, which contributed to fuel inflation for a more prolonged time.
This paper argues that the persistent inflation in the U.S. during the post-COVID economic recovery was mainly the result of the Fed's policy mistake caused by an overestimation of the negative output gap. The paper shows that after a two-quarter contraction, the U.S. economy quickly rebounded and outpaced its potential output, thus remaining in overheating territory. However, policymakers prolonged the monetary expansion beyond the necessary, which contributed to fuel inflation for a more prolonged time. The policy mistake was the result of an inaccurate estimation of potential output. Based on an alternative estimation that uses full employment as a condition, this paper shows that the U.S. economy has been running with a positive output gap since mid-2021. The results illustrate that the Federal Reserve was well-behind the curve in an economy in overexpansion and with a galloping inflation escalating well-above the target.& COPY; 2023 The Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

作者

我是这篇论文的作者
点击您的名字以认领此论文并将其添加到您的个人资料中。

评论

主要评分

4.3
评分不足

次要评分

新颖性
-
重要性
-
科学严谨性
-
评价这篇论文

推荐

暂无数据
暂无数据