Advanced Search
MyIDEAS: Login

Labor Market Frictions, Indeterminacy, and Interest Rate Rules

Contents:

Author Info

  • Zanetti, Francesco

Abstract

This paper studies the emergence of indeterminate equilibria in a standard New Keynesian model characterized by labor market frictions, under a policy rule that reacts strictly to inflation. Given labor market frictions, monetary policy may not be able to prevent aggregate fluctuations from being driven solely by self-fulfilling expectations. This is not, though, a result that holds under all circumstances: a monetary policy that reacts to some average measures of inflation or to the output gap may guarantee determinacy in the economy.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. 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.
File URL: http://dx.doi.org/10.1353/mcb.2006.0098
File Function: full text
Download Restriction: Access to full text is restricted to subscribers.

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.

Bibliographic Info

Article provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.

Volume (Year): 38 (2006)
Issue (Month): 7 (October)
Pages: 1959-1970

as in new window
Handle: RePEc:mcb:jmoncb:v:38:y:2006:i:7:p:1959-1970

Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Takushi Kurozumi & Willem Van Zandweghe, 2010. "Determinacy under inflation targeting interest rate policy in a sticky price model with investment (and labor bargaining)," Research Working Paper RWP 10-15, Federal Reserve Bank of Kansas City.
  2. Francesco Zanetti, 2006. "Labor Market Frictions into Staggered Wage Contracts," Economics Bulletin, AccessEcon, vol. 5(13), pages 1-7.
  3. Takushi Kurozumi & Willem Van Zandweghe, 2008. "Labor market search and interest rate policy," Research Working Paper RWP 08-03, Federal Reserve Bank of Kansas City.
  4. Michael U. Krause & Thomas A. Lubik, 2010. "Instability and indeterminacy in a simple search and matching model," Economic Quarterly, Federal Reserve Bank of Richmond, issue 3Q, pages 259-272.
  5. Carvalho, Alexandre & Moura, Marcelo L., 2008. "What Can Taylor Rules Say About Monetary Policy in Latin America?," Insper Working Papers wpe_126, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
  6. Loisel, O., 2006. "Bubble-free interest-rate rules," Working papers 161, Banque de France.
  7. Krause, Michael & Lubik, Thomas A., 2010. "Instability and indeterminacy in a simple search and matching model," Discussion Paper Series 1: Economic Studies 2010,25, Deutsche Bundesbank, Research Centre.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mcb:jmoncb:v:38:y:2006:i:7:p:1959-1970. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.