Federal Reserve Bank of St. Louis
P.O. Box 442
St. Louis, MO 63166-0442
Information about this author at RePEc
NBER Working Papers and Publications
|June 2013||The Great Inflation in the United States and the United Kingdom: Reconciling Policy Decisions and Data Outcomes|
with Edward Nelson
in The Great Inflation: The Rebirth of Modern Central Banking, Michael D. Bordo and Athanasios Orphanides, editors
This chapter examines the Great Inflation in the United States and the United Kingdom, arguing that both countries had similar experiences, and identifies the common themes in UK and US policymaking. It illustrates some key points about UK policymaking doctrine in the 1970s by examining the monetary policy shock realizations implied by a version of the Smets and Wouters (2007) model estimated on UK data. The chapter also considers more benign interpretations of UK monetary policy decisions during the 1970s.
|February 2010||Euro Membership as a U.K. Monetary Policy Option: Results from a Structural Model|
with Edward Nelson
in Europe and the Euro, Alberto Alesina and Francesco Giavazzi, editors
|April 2009||Euro Membership as a U.K. Monetary Policy Option: Results from a Structural Model|
with Edward Nelson: w14894
Developments in open-economy modeling, and the accumulation of experience with the monetary policy regimes prevailing in the United Kingdom and the euro area, have increased our ability to evaluate the effects that joining monetary union would have on the U.K. economy. This paper considers the debate on the United Kingdom's monetary policy options using a structural open-economy model. We use the Erceg, Gust, and López-Salido (EGL) (2007) model to explore both the existing U.K. regime (CPI inflation targeting combined with a floating exchange rate), and adoption of the euro, as monetary policy options for the United Kingdom. Experiments with a baseline estimated version of the model suggest that there is improved stability for the U.K. economy with monetary union. Once large difference...
|The Great Inflation in the United States and the United Kingdom: Reconciling Policy Decisions and Data Outcomes|
with Edward Nelson: w14895
We argue that the Great Inflation experienced by both the United Kingdom and the United States in the 1970s has an explanation valid for both countries. The explanation does not appeal to common shocks or to exchange rate linkages, but to the common doctrine underlying the systematic monetary policy choices in each country. The nonmonetary approach to inflation control that was already influential in the United Kingdom came to be adopted by the United States during the 1970s. We document our position by examining official policymaking doctrine in the United Kingdom and the United States in the 1970s, and by considering results from a structural macroeconomic model estimated using U.K. data.