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The Taylor principle and global determinacy in a non Ricardian world


  • Jean-Pascal Bénassy

    (PJSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CEPREMAP - Centre pour la recherche économique et ses applications)

  • Michel Guillard

    (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne)


The Taylor principle is quite usually considered as a central condition for price determinacy. Recently, however, this has been questioned on several grounds, notably because (i) this condition is a condition for local determinacy, not global determinacy (ii) it has been derived in "Ricardian" economies, and it appears that going to a non-Ricardian framework makes a very big difference for the determinacy conditions. In this paper we scrutinize the two issues together, and we find that for non-Ricardian equilibria the Taylor principle is replaced by another "financial dominance" criterion.

Suggested Citation

  • Jean-Pascal Bénassy & Michel Guillard, 2005. "The Taylor principle and global determinacy in a non Ricardian world," PSE Working Papers halshs-00590558, HAL.
  • Handle: RePEc:hal:psewpa:halshs-00590558
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    References listed on IDEAS

    1. Alstadheim Ragna & Henderson Dale W., 2006. "Price-Level Determinacy, Lower Bounds on the Nominal Interest Rate, and Liquidity Traps," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(1), pages 1-27, November.
    2. Parent, Antoine & Rault, Christophe, 2004. "The Influences Affecting French Assets Abroad Prior to 1914," The Journal of Economic History, Cambridge University Press, vol. 64(02), pages 328-362, June.
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    Cited by:

    1. Michel GUILLARD & Rym ALOUI, "undated". "A Simple "Public Debt-Deflation" Theory: Leeper revisited," EcoMod2010 259600067, EcoMod.

    More about this item


    Taylor principle; Taylor rules; global determinacy; price determinacy; non Ricardian economies; non Ricardian equilibria; Principe de Taylor; règles de Taylor; détermination globale; équilibres non Ricardiens; économies non Ricardiennes;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy


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