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Real wage rigidity and the Taylor principle

  • Araújo, Eurilton

This paper investigates conditions for equilibrium determinacy in the basic new Keynesian model with real wage rigidity. The determinacy region is increased under forward-looking rules and the Taylor principle continues to ensure equilibrium uniqueness under current-looking rules.

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File URL: http://www.sciencedirect.com/science/article/B6V84-4W0WJ2G-1/2/d67c638ec0ce69ee86a537cd9e870417
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 104 (2009)
Issue (Month): 1 (July)
Pages: 46-48

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Handle: RePEc:eee:ecolet:v:104:y:2009:i:1:p:46-48
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Olivier Blanchard & Jordi Galí, 2007. "Real Wage Rigidities and the New Keynesian Model," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(s1), pages 35-65, 02.
  2. Thomas Lubik & Massimiliano Marzo, 2003. "An Inventory of Simple Monetary Policy Rules in a New Keynesian Macroeconomic Model," Economics Working Paper Archive 500, The Johns Hopkins University,Department of Economics.
  3. Xiao, Wei, 2005. "Increasing Returns and the Design of Interest Rate Rules," Working Papers 2005-08, University of New Orleans, Department of Economics and Finance.
  4. Orphanides, Athanasios, 2003. "The quest for prosperity without inflation," Journal of Monetary Economics, Elsevier, vol. 50(3), pages 633-663, April.
  5. Bruckner, Matthias & Schabert, Andreas, 2003. "Supply-side effects of monetary policy and equilibrium multiplicity," Economics Letters, Elsevier, vol. 79(2), pages 205-211, May.
  6. Takushi Kurozumi, 2006. "Determinacy and Expectational Stability of Equilibrium in a Monetary Sticky-Price Model with Taylor Rule," Bank of Japan Working Paper Series 06-E-2, Bank of Japan.
  7. De Fiore, Fiorella & Liu, Zheng, 2005. "Does trade openness matter for aggregate instability?," Journal of Economic Dynamics and Control, Elsevier, vol. 29(7), pages 1165-1192, July.
  8. Roisland, Oistein, 2003. "Capital income taxation, equilibrium determinacy, and the Taylor principle," Economics Letters, Elsevier, vol. 81(2), pages 147-153, November.
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