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...

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Bibliographic Details

Published in:	Economic Inquiry Vol. 62; no. 4; pp. 1467 - 1494
Main Author:	Platonov, Konstantin
Format:	Article
Published:	Wiley-Blackwell Oct2024
Subjects:	Elasticity (Economics) Interest rates Taylor's rule Inflation targeting Monetary policy
Online Access:	View this record in EBSCOhost