Structural changes in the US economy: Is there a role for monetary policy?

Fabio Canova, Luca Gambetti

Research output: Contribution to journalArticleResearchpeer-review

90 Citations (Scopus)


This paper investigates the contribution of monetary policy to the changes in output growth and inflation dynamics in the US. We identify a policy shock and a policy rule in a time-varying coefficients VAR using robust sign restrictions. The transmission of policy shocks has been relatively stable. The variance of the policy shock has decreased over time, but policy shocks account for a small fraction of the level and the variations in inflation and output growth volatility and persistence. Finally we find little evidence of a significant increase in the long run response of the interest rate to inflation. © 2008 Elsevier B.V. All rights reserved.
Original languageEnglish
Pages (from-to)477-490
JournalJournal of Economic Dynamics and Control
Publication statusPublished - 1 Feb 2009


  • Inflation persistence
  • Monetary policy
  • Time-varying coefficients structural VARs
  • Transmission of shocks


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