Benhabib, Jess; Schmitt-Grohé, Stephanie; Uribe, Martín - 2001
-type interest rate feedback rules. That is, rules whereby the nominal interest rate is set as an increasing function of inflation … with a slope greater than one around an intended inflation target. This paper shows that such rules can easily lead to … chaotic dynamics. The result is obtained for feedback rules that depend on contemporaneous or expected future inflation. The …