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Equilibrium Determinacy and Inflation Measures for Interest Rate Rules
Airaudo, Marco; Zanna, Luis-Felipe - In: Review of Economic Dynamics 15 (2012) 4, pp. 573-592
Empirical evidence suggests that goods are highly heterogeneous with respect to the degree of price rigidity. We develop a two-sector dynamic general equilibrium model to study the equilibrium determinacy properties of interest rate rules that respond to inflation measures differing in their...
Persistent link: https://www.econbiz.de/10010575221
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Learning About Inflation Measures for Interest Rate Rules
Airaudo, Marco; Zanna, Luis-Felipe - Collegio Carlo Alberto, Università degli Studi di Torino - 2010
Empirical evidence suggests that goods are highly heterogeneous with respect to the degree of price rigidity. We develop a DSGE model featuring heterogeneous nominal rigidities across two sectors to study the equilibrium determinacy and stability under adaptive learning for interest rate rules...
Persistent link: https://www.econbiz.de/10008799719
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Market distortions and local indeterminacy: A general approach
Lloyd-Braga, Teresa; Modesto, Leonor; Seegmuller, Thomas - 2011
We provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations … classes of distortions responsible for indeterminacy. Our methodology consists in introducing general specifications for the … distortions influence the range of values for the elasticity of inputs substitution under which local indeterminacy and …
Persistent link: https://www.econbiz.de/10010278392
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Indeterminacy under input-specific externalities and implications for fiscal policy.
Seegmuller, Thomas - Maison des Sciences Économiques, Université Paris 1 … - 2006
In this paper, we introduce input-specific externalities in a dynamic general equilibrium model with heterogeneous … low degrees of capital-labor substitution, we show that indeterminacy requires not only a lower bound for the elasticity … condition for indeterminacy and larger increasing returns promote sadlle-path stability when inputs are high substitutes. Using …
Persistent link: https://www.econbiz.de/10005220174
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Indeterminacy and multiple steady states with sector-specific externalities
Magris, Francesco - In: Economic Modelling 29 (2012) 6, pp. 2664-2672
. We show that in order to get indeterminacy, the presence of both aggregate and sector-specific external effects is needed … consumption. We perform a sensitivity analysis and show that indeterminacy emerges for parameter values in line with those used in …
Persistent link: https://www.econbiz.de/10010588233
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Market Distortions and Local Indeterminacy: A General Approach
Lloyd-Braga, Teresa; Modesto, Leonor; Seegmuller, Thomas - Institute for the Study of Labor (IZA) - 2011
We provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations … classes of distortions responsible for indeterminacy. Our methodology consists in introducing general specifications for the … distortions influence the range of values for the elasticity of inputs substitution under which local indeterminacy and …
Persistent link: https://www.econbiz.de/10008922965
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Stable Sunspot Equilibria in a Cash-in-Advance Economy
Evans, George; Honkapohja, Seppo; Marimon, Ramon - In: Advances in Macroeconomics 7 (2007) 1, pp. 1165-1165
We analyze a monetary model with flexible labor supply, cash-in-advance constraints, and seigniorage- and tax-financed government spending. If the intertemporal elasticity of substitution of labor is greater than one, both determinate and indeterminate steady states exist. If the elasticity is...
Persistent link: https://www.econbiz.de/10005751181
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Are stationary hyperinflation paths learnable?
Adam, Klaus; Evans, George W.; Honkapohja, Seppo - 2003
Earlier studies of the seigniorage inflation model have found that the high-inflation steady state is not stable under adaptive learning. We reconsider this issue and analyze the full set of solutions for the linearized model. Our main focus is on stationary hyperinflationary paths near the...
Persistent link: https://www.econbiz.de/10010298287
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Are stationary hyperinflation paths learnable?
Adam, Klaus; Evans, George W.; Honkapoja, Seppo - 2003
Earlier studies of the seigniorage inflation model have found that the high-inflation steady state is not stable under adaptive learning. We reconsider this issue and analyze the full set of solutions for the linearized model. Our main focus is on stationary hyperinflationary paths near the...
Persistent link: https://www.econbiz.de/10011507885
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Are stationary hyperinflation paths learnable?
Adam, Klaus; Evans, George W.; Honkapohja, Seppo - Center for Financial Studies - 2003
Earlier studies of the seigniorage inflation model have found that the high-inflation steady state is not stable under adaptive learning. We reconsider this issue and analyze the full set of solutions for the linearized model. Our main focus is on stationary hyperinflationary paths near the...
Persistent link: https://www.econbiz.de/10010958763