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Determinacy of Equilibrium under Various Phillips Curves

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  • Yoshiyasu Ono

Abstract

Determinacy of equilibrium under the original, the backward-looking, the forward-looking and the hybrid Phillips curves is examined. If the monetary authority keeps the nominal money stock to be constant, the equilibrium path is always determinate under the original Phillips curve and the forward-looking one. Under the backward-looking one and the hybrid one, however, the path can be non-existent. The case of a Taylor rule is also examined. Under any of the four curves the path is always determinate if the monetary policy is active but is never determinate if it is passive.

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Paper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number 0706.

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Date of creation: Feb 2008
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Handle: RePEc:dpr:wpaper:0706

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