La indeterminación del nivel de precios cuando el banco central sigue una regla de tasa de interés
This article explains some solutions to the problem of Sargent-Wallace (1975) [S-W] on the price level when the central bank follows an interest rate rule. If the interest rate is previously set, the neoclassical IS/LM model is unable to solve the equilibrium price level. However, the artifice for its redemption also works in the S-W model with a deterministic rule. If the rule is stochastic then a similar problem unnoticed by Kerr- King (1996) emerges, requiring the assistance of rational expectations terms ventilated in the micro-founded of the new neoclassical synthesis.
Volume (Year): III (2008)
Issue (Month): 2 ()
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