) for estimating linear rational expectations models allowing for the possibility of indeterminacy. Fiscal policy is …

parameters of a simple forward-looking monetary rule. We solve the model under indeterminacy via the procedure introduced by … under indeterminacy is a mirror image of what it is under determinacy: both inflation persistence and the volatility of its … reduced-form innovations, for example, are increasing in the coefficient on inflation under indeterminacy, decreasing under …

to choose the optimal rule within a Taylor-type class they may be led to rules that generate indeterminacy and …

curve". The computation is performed both under equilibrium uniqueness and under indeterminacy. While under uniqueness the … indeterminacy a new result arises. We find that the tighter is the monetary policy, the higher is the inflation/output gap … volatility. This is due to impact of systematic monetary policy on inflation and output persistence. In fact, under indeterminacy …

Lubik and Schorfheide (2004) extend estimated DSGE models to address monetary policy indeterminacy. Their method leads …