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Optimal monetary policy in a New Keynesian model with endogenous growth

Listed author(s):
  • Annicchiarico, Barbara
  • Rossi, Lorenza

We study optimal monetary policy in a New Keynesian (NK) model with endogenous growth and knowledge spillovers external to each firm. We find that, in contrast with the standard NK model, the Ramsey dynamics implies deviation from full inflation targeting in response to technology and government spending shocks, while the optimal operational rule is backward looking and responds to inflation and output deviations from their long-run levels.

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File URL: http://www.sciencedirect.com/science/article/pii/S0164070413001687
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Article provided by Elsevier in its journal Journal of Macroeconomics.

Volume (Year): 38 (2013)
Issue (Month): PB ()
Pages: 274-285

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Handle: RePEc:eee:jmacro:v:38:y:2013:i:pb:p:274-285
DOI: 10.1016/j.jmacro.2013.10.001
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622617

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