Contemporary literature on monetary policy analysis concludes that use of an interest rate policy rule that responds to expected inflation in some future period may generate indeterminacy - a multiplicity of stable rational expectations (RE) solutions. By contrast, this article argues that in...

It is clear that at present various versions of the Calvo (1983) model of price adjustment are dominant in monetary policy analysis—see, e.g., Woodford (2003). This is true despite well-known criticisms including Mankiw (2001) or Mankiw and Reis (2002) and the well-documented need for the...

This paper conducts a theoretical comparison of the potential effectiveness, in terms of money stock controllability, of interest rate and reserve instruments. Whereas previous studies have been basically static, the present analysis is carried out in the context of a dynamic macroeconomic model...

This paper suggests that the relevant question concerning unit root' in the U.S. real GNP time series pertains to the relative importance of difference-stationary and trend-stationary components. Various analytical approaches indicate than an accurate answer is not obtainable with existing data....