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Understanding the New Keynesian model when monetary policy switches regimes

Farmer, Roger E. A.; Waggoner, Daniel F.; Zha, Tao - 2007

conditions for indeterminacy that are easy to implement and we show that the necessary and sufficient condition for determinacy … indeterminacy in a passive regime may spill over to an active regime no matter how active the latter regime is. As a result, a …

Persistent link: https://www.econbiz.de/10010292275

Investment spending, equilibrium indeterminacy, and the interactions of monetary and fiscal policy

Lubik, Thomas A. - 2003

sticky, and the less competitive firms are, the economy is likely to exhibit indeterminacy even if monetary policy is active. …

Persistent link: https://www.econbiz.de/10010293451

An inventory of simple monetary policy rules in a new Keynesian macroeconomic model

Lubik, Thomas A.; Marzo, Massimiliano - 2003

We derive necessary and suffcient conditions for simple monetary policy rules that guarantee equilibrium determinacy in the New Keynesian monetary model. Our modeling framework is derived from a fully specified optimization model that is still amenable to analytical characterisation. The...

Persistent link: https://www.econbiz.de/10010293494

Testing for indeterminacy: An application to US monetary policy

Lubik, Thomas A.; Schorfheide, Frank - 2002

This paper considers a prototypical monetary business cycle model for the U.S. economy, in which the equilibrium is undetermined if monetary policy is ‘inactive? In previous multivariate studies it has been common practice to restrict parameter estimates to values for which the equilibrium is...

Persistent link: https://www.econbiz.de/10010293510

Monetary policy, determinacy, and learnability in the open economy

Bullard, James; Schaling, Eric - 2006

We study how determinacy and learnability of global rational expectations equilibrium may be affected by monetary policy in a simple, two country, New Keynesian framework. The two blocks may be viewed as the U.S. and Europe, or as regions within the euro zone. We seek to understand how monetary...

Persistent link: https://www.econbiz.de/10011604657

Inflation forecast-based-rules and indeterminacy: a puzzle and a resolution

Levine, Paul; McAdam, Peter; Pearlman, Joseph G. - 2006

indeterminacy than standard rules with a finite forward horizon. Second, for such rules in difference form, the indeterminacy …

Persistent link: https://www.econbiz.de/10011604689

VAR analysis and the Great Moderation

Benati, Luca; Surico, Paolo - 2008

Most analyses of the U.S. Great Moderation have been based on structural VAR methods, and have consistently pointed towards good luck as the main explanation for the greater macroeconomic stability of recent years. Based on an estimated New-Keynesian model in which the only source of change is...

Persistent link: https://www.econbiz.de/10011604912

Determinacy and learnability of monetary policy rules in small open economies

Llosa, Gonzalo; Tuesta, Vicente - 2006

managed exchange rate rules can help to alleviate problems of both indeterminacy and expectational instability, yet these …

Persistent link: https://www.econbiz.de/10010278266

Money and prices under uncertainty

Nakajima, Tomoyuki; Polemarchakis, Herakles - 2001

remains indeterminacy indexed by an arbitrary probability measure over the set of states of the world. With an interest rate … policy, and only if the asset market is complete, indeterminacy is nominal: it affects prices, but not the allocation of … resources at equilibrium; with a money-supply policy, the indeterminacy is real. Portfolio policy sets the portfolio of assets …

Persistent link: https://www.econbiz.de/10010318888

Learning about monetary policy rules when labor market search and matching frictions matter

Kurozumi, Takushi; Van Zandweghe, Willem - In: Journal of economic dynamics & control 36 (2012) 4, pp. 523-535

Persistent link: https://www.econbiz.de/10009554341