The Lucas critique and the stability of
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Thomas A. Lubik; Paolo Surico
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Article
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2010
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John Wiley and Sons
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English
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## Abstract This paper reconsiders the empirical relevance of the Lucas critique using a DSGE sticky price model in which a weak central bank response to inflation generates equilibrium indeterminacy. The model is calibrated to capture the magnitude of the historical shift in the Federal Reserve's