Econometric Research Paper Example | Topics and Well Written Essays - 3500 words

Econometric - Research Paper Example Conversely, economists, especially those in the Keynesian culture emphasize that the unexpected monetary policies are what have great impacts on the economic situation of any country. In relevance to the analysis on macroeconomics, one of the serious issue is the real influence of both unanticipated and anticipated monetary policy. A comprehensive study on the topics affirms to the relative significance that it receives. For quite some time, progress in both the theoretical and empirical fronts acted as a basis for an appropriate analysis on the effect of anticipated and unanticipated policy shocks in the real economic sector of a country. Similarly, the crucial transformation in the behavior of the policy of financial issues have significant consequences in the study of anticipated and unanticipated monetary policy since two decades ago. Targeting inflation requires that the central banks make public the inflation targets that they should be able to attain in a given duration. As a result, in regards to this context, the economic agents have the capability to undertake actions concerning anticipated monetary issues. Subsequently, this resulted to better accomplished expectations that gave rise to a substantial drop in both the level and unpredictability of inflation rate. This essay reexamines the debate on the actual consequences of anticipated and unanticipated policy shocks. The aim is to offer a well-founded understanding of this concern about the central banks. As a result, this will expectantly result to a better perception of the way that central banks are using towards a more approachable and effective behavi or of monetary policy. In addition, this article is structured as follows: the next section offers a short review of the literature on business cycle frameworks and the debate on anticipated and unanticipated monetary policy shocks. The third section