Increasing Returns and the Design of Interest Rate Rules;
نویسنده
چکیده
We introduce increasing returns to scale into an otherwise standard New Keynesian model with capital, and study the determinacy and E-stability of Taylor-type interest rate rules. With very mild increasing returns supported by empirical research, the conventional wisdom regarding the design of interest rate rules can be overturned. In particular, the “Taylor principle” no longer guarantees either determinacy or E-stability of the rational expectations equilibrium.
منابع مشابه
The Effects of Interest Rates Volatility on Stock Returns: Evidence from Bangladesh
The paper investigates the effects of interest rates on stock market performance by using monthly time series data for the economy of Bangladesh over the period of 1991 to 2012. A wide range of econometric techniques have been employed to analyze the relationship between the interest rate and stock market return. The study reveals a stable and significant long run relationship between the varia...
متن کاملReconnoitering the effective Channels of Monetary Transmission Mechanism in Iran Using a Dynamic Stochastic General Equilibrium Model
The purpose of the present research is to investigate the effective channels of the monetary transmission mechanism in Iran. To do so, we devised a New Keynesian Dynamic Stochastic General Equilibrium Model. In our model, the different types of nominal rigidities are introduced beside all the related structural equations, which are extracted and linearized around a steady state point. Furthermo...
متن کاملThe Analysis of Real Exchange Rate Volatility and Stock Exchange Return with PANEL-GARCH Approach (Case Study: D8 Countries)
S tock returns of companies listed on the stock exchange is one of the most important criteria in assessing the macroeconomic. This study investigates the effect of exchange rate Volatility on the stock exchange Returns of D8 countries. It takes monthly data during the period (2008:1-2015:6) constituting 90 observations. At first we used Panel-GARCH model to estimate Exchange Rate Vo...
متن کاملسرعت مجاز سیاست بهینه پولی در اقتصاد ایران
The commitment and forward-looking behavior of central bank is of great importance. Commitment imposes less social costs on the central bank and the public. However, while there is wide agreement on the importance of commitment, there is much less consensus on how to implement commitment through targeting or instrumental rules. In this paper, we have estimated a basic New Keynesian model in I...
متن کاملارزیابی رژیم‌های مختلف ارزی در یک اقتصاد باز کوچک
This research is an attempt to study about the efficiency of different exchange-rate regimes based on reduces in loss function of central bank in a form of Dynamic Stochastic General Equilibrium (DSGE), considering an oil exporting economy such as Iran's Economy. Thus, after adjusting a pattern, considering the structural characteristic of Iran’s Economy as oil exporting country and obtaining m...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
عنوان ژورنال:
دوره شماره
صفحات -
تاریخ انتشار 2006