Figure 6: Impulse Responses to an Aggregate Supply Shock
Response of Output Gap
Response of Inflation
Response of Long Rate
Response of Fed Funds Rate
Time-varying
Response of Target
Percent
1.0
0.8
0.6
0.4
0.2
0.0
-0.2
-10 0 10 20 30 40 50
Constant
Response of Perceived Target
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