Fuhrer, Jeffrey C; Moore, George R - In: Journal of Money, Credit and Banking 27 (1995) 4, pp. 1060-70
At the turn of the century, Knut Wicksell proposed a monetary policy rule that has become conventional wisdom: raise interest rates when inflation is above target and vice versa. The authors discover some surprising properties of this rule. When the rule is included in a model in which inflation...