Orphanides, Athanasios; Williams, John C. - 2007
problem regarding the output gap; and Laubach and Williams (2003), Orphanides and Williams
(2002) and Clark and Kozicki (2005 … output gap for our analysis, recognizing that the
two are related by Okun’s (1962) law.
4
In his 1993 exposition, Taylor … examined response
parameters equal to 1/2 for both the inflation gap and the output gap. Using an Okun’s
coefficient of 2, this …