"CHANGES IN MONETARY POLICY COULD CONCEIVABLY AFFECT THE SIZE AND FREQUENCY OF SHOCKS HITTING THE ECONOMY...SHOCKS IN THIS SENSE MAY CERTAINLY REFLECT THE MONETARY REGIME. FOR EXAMPLE, CONSIDER TH

"CHANGES IN MONETARY POLICY COULD CONCEIVABLY AFFECT THE SIZE AND FREQUENCY OF SHOCKS HITTING THE ECONOMY...SHOCKS IN THIS SENSE MAY CERTAINLY REFLECT THE MONETARY REGIME. FOR EXAMPLE, CONSIDER THE COST-PUSH SHOCKS THAT PLAYED SUCH AN IMPORTANT ROLE IN 1970S' THINKING ABOUT INFLATION. SEEMINGLY UNEXPLAINED OR AUTONOMOUS MOVEMENTS IN WAGES AND PRICES DURING THIS PERIOD, WHICH ANALYSTS WOULD HAVE INTERPRETED AS SHOCKS TO WAGE AND PRICE EQUATIONS, MAY IN FACT HAVE BEEN THE RESULT OF EARLIE

Monetary policy regime shifts tied to 1970s cost-push shocks signal high macro relevance.