LLOSA, LUIS-GONZALO; TUESTA, VICENTE - In: Journal of Money, Credit and Banking 40 (2008) 5, pp. 1033-1063
This paper evaluates under which conditions different Taylor-type rules lead to determinacy and expectational stability (E-stability) of rational expectations equilibrium in a simple "New Keynesian" small open economy model, developed by Gali and Monacelli (2005). In particular, we extend...