Dolado, Juan J.; María-Dolores, Ramón; Ruge-Murcia, … - C.E.P.R. Discussion Papers - 2002
This Paper derives optimal monetary policy rules in setups where certainty equivalence does not hold because either central bank preferences are not quadratic, and/or the aggregate supply relation is non-linear. Analytical results show that these features lead to sign and size asymmetries, and...