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Estimated Interest Rate Rules: Do they Determine Determinacy Properties?

  • Jensen Henrik

    ()

    (University of Copenhagen)

I demonstrate that econometric estimations of nominal interest rate rules may tell little, if anything, about an economy's determinacy properties. In particular, correct inference about the interest-rate response to inflation provides no information about determinacy. Instead, it could reveal whether optimal monetary policymaking is performed under discretion or commitment.

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Article provided by De Gruyter in its journal The B.E. Journal of Macroeconomics.

Volume (Year): 11 (2011)
Issue (Month): 1 (May)
Pages: 1-22

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Handle: RePEc:bpj:bejmac:v:11:y:2011:i:1:n:11
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