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Monetary policy, determinacy, and the natural rate hypothesis
Meyer-Gohde, Alexander - 2011
Imposing the natural rate hypothesis (NRH) can dramatically alter the determinacy bounds on monetary policy by closing … the output gap in the long run. I show that the hypothesis eliminates any role for the output gap in determinacy and … renders the conditions for determinacy identical for all conforming supply equations. Specializing further to IS demand …
Persistent link: https://www.econbiz.de/10010333041
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On determinacy and learnability in a New Keynesian model with unemployment
Tesfaselassie, Mewael F.; Schaling, Eric - 2009
We analyze determinacy and stability under learning (E-stability) of rational expectations equilibria in the Blanchard … explaining unemployment instability. Under lagged data based rules the area where monetary policy delivers both determinacy and E …-based rules - unlike Bullard and Mitra (2002) - an additional explosive region is introduced. Here also the scope for determinacy …
Persistent link: https://www.econbiz.de/10010265227
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A case for interest rate inertia in monetary policy
Bask, Mikael - 2011
We argue that it is not necessary for the central bank to react to the exchange rate to have a desirable outcome in the economy. Indeed, when the Taylor rule includes contemporane-ous data on the variables in the rule, the central bank can disregard from the exchange rate as long as there is...
Persistent link: https://www.econbiz.de/10010321452
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Determinacy in new Keynesian models: A role for money after all?
Minford, Patrick; Srinivasan, Naveen - 2009
The New-Keynesian Taylor-Rule model of inflation determination with no role for money is incomplete. As Cochrane (2007a) argues, it has no credible mechanism for ruling out bubbles and as a result fails to provide a reason for private agents to pick a unique stable path. We propose a way...
Persistent link: https://www.econbiz.de/10010288779
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The Taylor principle and (in-)determinacy in a New Keynesian model with hiring frictions and skill loss
Rannenberg, Ansgar - 2010
-unemployment relationship is positive, determinacy requires a passive response to inflation in the central bank's interest feedback rule if the … rule features only inflation. Targeting steady state output or unemployment helps to restore determinacy. Under …
Persistent link: https://www.econbiz.de/10011506728
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Limited Asset Market Participation: Does it Really Matter for Monetary Policy?
Ascari, Guido; Colciago, Andrea; Rossi, Lorenza - 2010
determinacy for any empirically plausible degree of LAMP; ii) the effect of LAMP for the design of optimal monetary policy are …
Persistent link: https://www.econbiz.de/10010343880
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An equilibrium theory of nominal exchange rates
Hagedorn, Marcus - 2021
This paper proposes an equilibrium theory of nominal exchange rates, which offers a new perspective on various issues in open economy macroeconomics. The nominal exchange rate and portfolio choices are jointly determined in equilibrium, thus providing a new approach to overcoming the...
Persistent link: https://www.econbiz.de/10012619299
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A behavioral heterogeneous agent New Keynesian model
Pfäuti, Oliver; Seyrich, Fabian - 2022
We propose a behavioral heterogeneous agent New Keynesian model in which monetary policy is amplified through indirect general equilibrium effects, fiscal multipliers can be larger than one and which delivers empirically-realistic intertemporal marginal propensities to consume. Simultaneously,...
Persistent link: https://www.econbiz.de/10012815994
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The Taylor principle and (in-)determinacy in a New Keynesian model with hiring frictions and skill loss
Rannenberg, Ansgar - 2010
-unemployment relationship is positive, determinacy requires a passive response to inflation in the central bank's interest feedback rule if the … rule features only inflation. Targeting steady state output or unemployment helps to restore determinacy. Under …
Persistent link: https://www.econbiz.de/10011596398
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Positive trend inflation and determinacy in a medium-sized new keynesian model
Arias, Jonas E.; Ascari, Guido; Branzoli, Nicola; … - 2018
This paper studies the challenge that increasing the inflation target poses to equilibrium determinacy in a medium …, such as 2 or 4 percent, the probability of determinacy is near one conditional on the monetary policy rule of the estimated …
Persistent link: https://www.econbiz.de/10011864684