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Technological change and monetary policy in a sticky-price model


  • Tsuzuki, Eiji
  • Inoue, Tomohiro


We developed a sticky-price model that introduces the factors of (a) the non-separability of consumption and labor in the utility function and (b) a technological change induced by the investment of profits, to analyze the determinacy of equilibrium. We found that while engaging in inflation targeting increases the probability of determinacy, engaging in share-price targeting decreases the probability of determinacy in a standard sticky-price model; engaging in both inflation targeting and share-price targeting can increase the probability of determinacy in our model.

Suggested Citation

  • Tsuzuki, Eiji & Inoue, Tomohiro, 2011. "Technological change and monetary policy in a sticky-price model," Research in Economics, Elsevier, vol. 65(3), pages 180-194, September.
  • Handle: RePEc:eee:reecon:v:65:y:2011:i:3:p:180-194

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    References listed on IDEAS

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