Eleftheriou, MariaKouretas, Georgios P.2023-09-252023-09-252022Maria Eleftheriou, Georgios P. Kouretas, Monetary policy rules and inflation control in the US, Economic Modelling, Volume 119, 2023, 106137, ISSN 0264-9993, https://doi.org/10.1016/j.econmod.2022.1061370264-9993https://hdl.handle.net/10115/24513The interplay between policy-setting by the Federal Reserve and inflation is explored during a period with significant and diverse episodes from 1979 onwards. Our unrestricted estimates reveal a stable target path for the policy rate with a strong response to inflation and an effective control over it. We identify moments of discretionary and rule-based policy-making throughout three different chairmanships and quantify the degree of policy inertia. Including the ‘great recession’ and the first years after the crisis leaves the above-mentioned characteristics unchanged and shows that the adjustment to deviations from the target path becomes less gradual. Replacing the federal funds rate with a shadow rate yields ineffective inflation control, indicating that the dynamic behaviour of inflation is affected by the implementation of unconventional policy when the zero lower bound applies.engAttribution-NonCommercial-NoDerivatives 4.0 Internacionalhttp://creativecommons.org/licenses/by-nc-nd/4.0/Monetary policyFederal reserveTaylor ruleCointegrationVEC modelinfo:eu-repo/semantics/article10.1016/j.econmod.2022.106137info:eu-repo/semantics/openAccess