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Evaluating Inflation Targeting Using A Macroeconometric Model, Ray C. Fair
Evaluating Inflation Targeting Using A Macroeconometric Model, Ray C. Fair
Ray C Fair
This paper uses a structurally estimated macroeconometric model, denoted the MC model, to evaluate inflation targeting in the United States. Various interest rate rules are tried with differing weights on inflation and output, and various optimal control problems are solved using differing weights on inflation and output targets. Price-level targeting is also considered. The results show that 1) there are output costs to inflation targeting, especially for price shocks, 2) price-level targeting is dominated by inflation targeting, 3) the estimated interest rate rule of the Fed (in Table 4) is consistent with the Fed placing equal weights on inflation and …
Presidential And Congressional Vote-Share Equations, Ray C. Fair
Presidential And Congressional Vote-Share Equations, Ray C. Fair
Ray C Fair
Three vote-share equations are estimated and analyzed in this paper, one for presidential elections, one for on-term House elections, and one for mid-term House elections. The sample period is 1916--2006. Considering the three equations together allows one to test whether the same economic variables affect each and to examine various serial correlation and coattail possibilities. The resulting three equation model can then be analyzed dynamically, which is done in Section 4. The main conclusions are briefly: 1) There is strong evidence that the economy affects all three vote shares and in remarkably similar ways. 2) There is no evidence of …