Interest rate rules and macroeconomic stabilization

High degrees of relative risk aversion induce indeterminacy in cash-in-advance economies. This paper finds that Taylor-style policies can pre-empt such sunspot equilibria. Spécifie policy recommendations dépend on the fundamentals of the economy. i.e. the cmpirically true value of coefficient of relative risk aversion.

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Year of publication:	2006-06-01
Authors:	WEDER, Mark
Institutions:	Institut de Recherche Économique et Sociale (IRES), École des Sciences Économiques de Louvain
Subject:	Cash-in-advance economies \| Taylor rules \| sunspot equilibria

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Extent:	application/pdf
Series:	Discussion Papers (REL - Recherches Economiques de Louvain).
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Sciences Economiques Number 2006025 2 pages long
Classification:	E32 - Business Fluctuations; Cycles ; E52 - Monetary Policy (Targets, Instruments, and Effects)
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004985462