IMF paper on the art of central banking

The IMF working paper 'Deconstructing the art of central banking' proposes a significantly different transmission mechanism from monetary policy to the macroeconomy, focusing on how policy changes nominal inertia in the Phillips curve. The authors find that changes in monetary policy are linked to shifts in nominal inertia, and that this is the main channel through which monetary policy lowers the volatility of inflation and output.

Click here to read the Working Paper "Deconstructing the art of

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