For an economy characterized by neo-Keynesian wage rigidity, an optimal open market rule is derived based on financial market information, including auction price behavior. Simulations of a small model of the United States--estimated via full information maximum likelihood together with a numerical procedure for solving dynamic, linear rational expectations models--are used to evaluate the response of the economy to sectoral shocks, given the optimal interest rate rule. In the case of three aggregate commodity price indexes studied here, the additional indicator information is unlikely to have significant impact on the performance of monetary policy. Copyright 1994 by Ohio State University Press.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 26 (1994) Issue (Month): 4 (November) Pages: 917-33 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF