Juillard, Michel; Karam, Philippe; Laxton, Douglas; … - 2006
� as described by the reaction function parameters �
may have signi�cant �rst-order e�ects on welfare through its impact on … swings in in�ation, they allow
for a unit root in the in�ation target
t
in the interest rate reaction function to proxy for …
processes, except we allow for serial correlation in the shock that enters the interest rate reaction function
while they assume …