... Taylorrule. Following Cúrdia and Woodford (2010) and Hirakata, Sudo, and Ueda (2011b), we de…ne arule as a monetary policy rule that lowers the intercept of the standard Taylor rule by respondingto ... meet the aggregatedemand F(st) : The aggregate demand is not known to the operator and it infers the aggregate12See Christiano, Motto, and Rostagno (2003, 2008, and 2010) for quantitative ... shocks and document that such news shocks are quantitatively importantdrivers of the business cycle ‡uctuation in the U.S. and in Japan (Fujiwara, Hirose, and Shintani2009; and Schimitt-Grohé and...