Table 6: Coefficients from Four-equation Model Estimated for 1962:Q1–2004:Q4

Endogenous variables
		Dependent variable
			Nominal federal funds rate
	Lags included	Inflation rate	1960:Q1–1979:Q2 ‘Burns’ AR(1) correction?		1979:Q2–1990:Q2 ‘Volcker’ AR(1) correction?		1990:Q3–2004:Q4 ‘Greenspan’ AR(1) correction?		Δ output gap	Unemployment gap
			No	Yes	No	Yes	No	Yes
Note: ** and * indicate that coefficient or sum of coefficients is significant at the 1 and 5 per cent levels, respectively. Source: author's calculations
Inflation	1–24	0.98^**
Inflation minus
inflation target	0–1		0.45^**	0.66^**	1.46^**	1.55^**	1.43^**	0.57^*
Δ inflation rate	1–4								0.17
Federal funds rate error term	1			0.89^**		0.70^**		1.00^**
Δ federal funds rate	2–10								−1.06^**
Level of unemployment gap	0–4	−0.63^**
Level of output gap	0–1		0.24^**	0.49^**	−0.03	0.11	0.95^**	0.60^**
Level of output gap	0–2									−0.52^**
Exogenous variables
Relative price of imports	1–4	0.11^**
Food-energy effect	0–4	0.65^**
Medical care effect	1–4	1.12^**
Productivity trend acceleration	0	−0.62^*
Nixon controls ‘on’	0	−1.45^**
Nixon controls ‘off’	0	2.19^**
²		0.90	0.62	0.91	0.69	0.82	0.31	0.95	0.20	0.88
Standard error of estimate		0.76	1.50	0.74	1.70	1.37	1.56	0.39	0.75	0.50
Sum of squared residuals		82.3	165.9	39.85	126.7	71.2	130.9	7.9	87.2	41.7