EVANS, GEORGE W.; McGOUGH, BRUCE - In: Journal of Money, Credit and Banking 39 (2007) 6, pp. 1335-1356
We show that if policymakers compute the optimal unconstrained interest-rate rule within a Taylor-type class, they may be led to rules that generate indeterminacy and/or instability under learning. This problem is compounded by uncertainty about structural parameters since an optimal rule that...