Inflation targeting, output stabilization, and real indeterminacy in monetary models with an interest rate rule.
Central banks set the nominal interest rate to target inflation and stabilize output. In monetary models, monetary policy affects output directly via the wealth effect. I show that in these models, the response of the central bank to fluctuations in output may induce real indeterminacy even if the T...
| Publicado en: | Economic Inquiry Vol. 62; no. 4; pp. 1467 - 1494 |
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| Formato: | Artículo |
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Wiley-Blackwell
Oct2024
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=179808510&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 179808510 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00952583 EIQ jtl: Economic Inquiry issn: 00952583 maglogo: Y pubinfo: dt: Oct2024 vid: 62 iid: 4 pid: 480 pub: Wiley-Blackwell artinfo: ui: 179808510 10.1111/ecin.13248 ppf: 1467 ppct: 27 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 1.2MB tig: atl: Inflation targeting, output stabilization, and real indeterminacy in monetary models with an interest rate rule. aug: au: Platonov, Konstantin affil: Department of Economics, Loyola Marymount University, Los Angeles California, , USA su: Elasticity (Economics) Interest rates Taylor's rule Inflation targeting Monetary policy sug: subj: Elasticity (Economics) Interest rates Taylor's rule Inflation targeting Monetary policy keyword: determinacy indeterminacy monetary model money in production money in utility Taylor principle wealth effect determinacy indeterminacy monetary model money in production money in utility Taylor principle wealth effect ab: Central banks set the nominal interest rate to target inflation and stabilize output. In monetary models, monetary policy affects output directly via the wealth effect. I show that in these models, the response of the central bank to fluctuations in output may induce real indeterminacy even if the Taylor principle is satisfied. I find that the determinacy conditions depend on the interest elasticity of output and generally, the Taylor principle is neither necessary nor sufficient for determinacy. This is in stark contrast with the New Keynesian model where a sufficiently strong policy response to inflation or output usually ensures determinacy. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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