Optimal monetary policy in a New Keynesian model with endogenous growth

We study optimal monetary policy in a New Keynesian (NK) model with endogenous growth and knowledge spillovers external to each firm. We find that, in contrast with the standard NK model, the Ramsey dynamics implies deviation from full inflation targeting in response to technology and government spending shocks, while the optimal operational rule is backward looking and responds to inflation and output deviations from their long-run levels.

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Year of publication:	2013
Authors:	Annicchiarico, Barbara ; Rossi, Lorenza
Published in:	Journal of Macroeconomics. - Elsevier, ISSN 0164-0704. - Vol. 38.2013, PB, p. 274-285
Publisher:	Elsevier
Subject:	Monetary policy \| Endogenous growth \| Ramsey problem \| Optimal simple rules

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Type of publication:	Article
Classification:	E32 - Business Fluctuations; Cycles ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; O42 - Monetary Growth Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010875186