Gavin, William T.; Kydland, Finn; Pakko, Michael R. - 2022
In this paper, we model the interaction of inflation with the tax on nominal capital gains, examining the contribution … persistent shocks to the inflation objective. The use of an interest rate rule makes these shocks highly persistent, leading to … behavior of the business cycle before 1980 because the shocks to inflation were large and persistent. Monetary policy reform …