Unique Monetary Equilibria with Interest Rate Rules
In contrast to previous literature, we show that it is possible to use interest rate rules in standard monetary models to implement equilibria that are globally unique. This is a contribution to a literature that either concentrates on conditions for local determinacy, or criticizes that approach showing that local determinacy might be associated with global indeterminacy. The interest rate rules we propose are price level targeting rules that respond to the forecasts of the future price level and future economic activity. (Copyright: Elsevier)
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Volume (Year): 14 (2011)
Issue (Month): 3 (July)
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- Andrew Atkeson & V. V. Chari & Patrick Kehoe, 2009.
"Sophisticated Monetary Policies,"
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- Lawrence J. Christiano & Massimo Rostagno, 2001. "Money Growth Monitoring and the Taylor Rule," NBER Working Papers 8539, National Bureau of Economic Research, Inc.
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"Short and Long Interest Rate Targets,"
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452, Society for Economic Dynamics.
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- Bernardino Adão & Isabel Correia & Pedro Teles, 2010. "Short and long interest rate targets," Working Papers 680, Federal Reserve Bank of Minneapolis.
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"Determinacy and Identification with Taylor Rules,"
NBER Working Papers
13409, National Bureau of Economic Research, Inc.
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