Tracking a central banker's preference: A nonparametric regression approach

Cheolbeom Park; Sookyung Park

doi:10.1111/boer.12288

Tracking a central banker's preference: A nonparametric regression approach

Cheolbeom Park, Sookyung Park

Department of Economics

Research output: Contribution to journal › Article › peer-review

Abstract

We examine how the Fed's preference influences the behavior of inflation rate and unemployment rate using US data over the period of 1960–2017. After showing instability in a constant-coefficient regression, we run a nonparametric regression, and find that the Fed's preference parameters have moved, implying that its preference can be represented by the asymmetric preference model putting more weights on high unemployment rate approximately before the era of Volcker's chairmanship and by the inflation targeting model during the 1980s and 1990s. The Fed's preferences again seem concerned about higher unemployment after the Global Financial Crisis.

Original language	English
Pages (from-to)	291-307
Number of pages	17
Journal	Bulletin of Economic Research
Volume	74
Issue number	1
DOIs	https://doi.org/10.1111/boer.12288
Publication status	Published - 2022 Jan

ASJC Scopus subject areas

Economics and Econometrics

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1111/boer.12288

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abstract = "We examine how the Fed's preference influences the behavior of inflation rate and unemployment rate using US data over the period of 1960–2017. After showing instability in a constant-coefficient regression, we run a nonparametric regression, and find that the Fed's preference parameters have moved, implying that its preference can be represented by the asymmetric preference model putting more weights on high unemployment rate approximately before the era of Volcker's chairmanship and by the inflation targeting model during the 1980s and 1990s. The Fed's preferences again seem concerned about higher unemployment after the Global Financial Crisis.",

author = "Cheolbeom Park and Sookyung Park",

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N2 - We examine how the Fed's preference influences the behavior of inflation rate and unemployment rate using US data over the period of 1960–2017. After showing instability in a constant-coefficient regression, we run a nonparametric regression, and find that the Fed's preference parameters have moved, implying that its preference can be represented by the asymmetric preference model putting more weights on high unemployment rate approximately before the era of Volcker's chairmanship and by the inflation targeting model during the 1980s and 1990s. The Fed's preferences again seem concerned about higher unemployment after the Global Financial Crisis.

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Tracking a central banker's preference: A nonparametric regression approach

Abstract

ASJC Scopus subject areas

UN SDGs

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