The design of interest rate rules for conducting monetary policy have recently been examined for two key concerns. The first issue is determinacy of equilibria. Indeterminacy (multiplicity of stationary rational expectations equilibria) is a concern in models of monopolistic competition and...

We examine a recursive algorithm for learning steady states and cycles in stochastic nonlinear models. Necessary and sufficient conditions for local convergence are shown to be equivalent to easily computable expectational-stability conditions. These conditions are affected by the distribution...

In this paper we develop a stochastic monetary growth model with exogenous productivity shocks to consider the effects of changes in the financing structure of government deficits on the key variables of the economy. We study how the presence of supply-side uncertainty affects the equilibrium of...

We develop a monetary model with flexible supply of labor, cash in advance constraints and government spending financed by seignorage. This model has two regimes. One regime is conventional with two steady states. The other regime has a unique steady state which can be determinate or...