BULLARD, JAMES; MITRA, KAUSHIK - In: Journal of Money, Credit and Banking 39 (2007) 5, pp. 1177-1212
We show how monetary policy inertia can help alleviate problems of indeterminacy and non-existence of stationary equilibrium observed for some commonly studied monetary policy rules. We also find that inertia promotes learnability of equilibrium. The context is a simple, forward-looking model of...