Interest Rate Rules and Nominal Determinacy
نویسندگان
چکیده
منابع مشابه
Interest Rate Rules and Global Determinacy: An Alternative to the Taylor Principle
A most wellknown determinacy condition on interest rate rules is the “Taylor principle”, which says that nominal interest rates should respond more than hundred percent to inflation. Unfortunately, notably because interest rates must be positive, the Taylor principle cannot be satisfied for all interest rates, and as a consequence global determinacy may not prevail even though there exists a lo...
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This article studies under which conditions interest rate rules “à la Taylor (1993)” lead to price determinacy. We scrutinize notably two famous results, which are standard in the traditional “Ricardian” model with a single dynasty of consumers: (1) a pure interest rate peg leads to nominal price indeterminacy; (2) a strong reaction (usually more than one for one) of nominal interest rates to i...
متن کاملOptimal Interest-Rate Rules
To be added.] ∗This is a revision of the text delivered by the second author as the Jacob Marschak Lecture at the 2001 Far Eastern Meeting of the Econometric Society, Kobe, Japan, July 21, 2001. We thank Julio Rotemberg and Lars Svensson for helpful discussions, and the National Science Foundation, through a grant to the NBER, for research support. Views expressed are those of the authors and d...
متن کاملChaotic Interest-Rate Rules
A growing empirical and theoretical literature argues in favor of specifying monetary policy in the form of Taylor-type interest rate feedback rules. That is, rules whereby the nominal interest rate is set as an increasing function of inflation with a slope greater than one around an intended inflation target. This paper shows that because of the zero bound on nominal interest rates, such rules...
متن کاملChaotic Interest Rate Rules∗ (PRELIMINARY)
A growing empirical and theoretical literature argues in favor of specifying monetary policy in the form of Taylor-type interest rate feedback rules. That is, rules whereby the nominal interest rate is set as an increasing function of inflation with a slope greater than one around an intended inflation target. This paper shows that because of the zero bound on nominal interest rates, such rules...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 1990
ISSN: 1556-5068
DOI: 10.2139/ssrn.2123473