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rules. Our results highlight how growth matters for the overall effect of opening an economy to more trade, as we find that … supply and balanced growth facts. -- Trend growth ; open economy ; monetary policy rules ; determinacy ; learning …
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We analyze determinacy and stability under learning (E-stability) of rational expectations equilibria in the Blanchard and Galí (2006, 2008) New-Keynesian model of inflation and unemployment, where labor market frictions due to costs of hiring workers play an important role. We derive results...
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