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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

Sticky information and determinacy

Meyer-Gohde, Alexander - 2011

difference equations in order to directly assess determinacy in the model with demand given by the forward-looking IS equation … tenuously) for the particular specification and a common truncation method produces spurious determinacy. …

Persistent link: https://www.econbiz.de/10010281516

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

Can the learnability criterion ensure determinacy in New Keynesian models?

Minford, Patrick; Srinivasan, Naveen - 2012

model economy behaves. We need some mechanism that ensures determinacy. McCallum (2011) says it is not needed because models …

Persistent link: https://www.econbiz.de/10010288805

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

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