Endogenous growth and the Taylor principle

This paper analyzes conditions for determinacy in a new Keynesian model with endogenous growth. Endogenous growth shrinks the determinacy region considerably. Complying with the Taylor principle is not sufficient for determinacy, which decreases in the spillovers from actual on potential output. Monetary policy therefore has to be more aggressive than in an exogenous growth setup to ensure determinacy.

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Year of publication:	2017
Authors:	Micheli, Martin
Publisher:	Essen : RWI - Leibniz-Institut für Wirtschaftsforschung
Subject:	Endogenous growth \| business cycle \| monetary policy \| Taylor principle

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Series:	Ruhr Economic Papers ; 726
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
ISBN:	978-3-86788-846-2
Other identifiers:	10.4419/86788846 [DOI] 1009616803 [GVK] hdl:10419/172478 [Handle] RePEc:zbw:rwirep:726 [RePEc]
Classification:	E32 - Business Fluctuations; Cycles ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; O42 - Monetary Growth Models
Source:	EconStor

Persistent link: https://www.econbiz.de/10011764720