assumption and examines the performance of optimal rules when non-linearities are present. In particular if the inflation …-output trade off exhibits non linearities (convexities) this will impart a bias to inflation when a linear rule is used. To correct … interest rate. Finally we examine how the zero floor on nominal interest rate affects output and inflation when both rules are …

the inflation–unemployment dynamics during the recession and COVID-19 times in India and the UK. Using a generalized … recession and eventually turn to stagflation in India due to inflation caused by the weak supply side. However, in the UK, the …