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Estimated Interest Rate Rules: Do they Determine Determinacy Properties?

  • Jensen, Henrik

No. I demonstrate that econometric estimations of nominal interest rate rules may tell little, if anything, about an economy's determinacy properties. In particular, correct inference about the interest-rate response to inflation provides no information about determinacy. Instead, it could reveal whether optimal monetary policymaking is performed under discretion or commitment.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7555.

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Date of creation: Nov 2009
Handle: RePEc:cpr:ceprdp:7555
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