Response of Output Gap
Percent
1.2
1.0
0.8
0.6
0.4
0.2
0.0
-0.2
-0.4
-10 0 10 20 30 40 50
Figure 12: Implications of Faster Learning for Impulse Responses
to a Permanent Target Shock
Response of Inflation
Response of Long Rate
Response of Fed Funds Rate
Response of Perceived Target
and Target
Percent
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