Chiodo, Abbigail; Guidolin, Massimo; Owyang, Michael T.; … - Federal Reserve Bank of St. Louis - 2003
accelerates inflation typical of the early stages of
monetary policy-induced cooling of the economy (via representativeness). In … monetary policy acts counter-
cyclically, the negative correlation between real stock returns and inflation derives from the … monetary policy reaction functions (see Clarida, Gali, and Gertler (1999)) make a belief-based
mechanism more appealing …