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determinacy under inflation targeting interest rate policy in a sticky price model with investment (and labor bargaining)

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In a sticky price model with investment spending, recent research shows that inflation-forecast targeting interest rate policy makes determinacy of equilibrium essentially impossible. We examine a necessary and sufficient condition for determinacy under interest rate policy that responds to a weighted average of an inflation forecast and current inflation. This condition demonstrates that the average-inflation targeting policy ensures determinacy as long as both the response to average inflation and the relative weight of current inflation are large enough. We also find that interest rate policy that responds solely to past inflation guarantees determinacy when its response satisfies the Taylor principle and is not large. These results still hold even when wages and hours worked are determined by Nash bargaining. [PUBLICATION ABSTRACT].Printed journal

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Ketersediaan

Call Number	Location	Available
JMCB4304	PSB lt.dasar - Pascasarjana	1

Penerbit	The Ohio State University.,
Edisi	-
Subjek	Monetary policy Inflation Interest rates Economic models Game theory studies
ISBN/ISSN	222879
Klasifikasi	-
Deskripsi Fisik	-
Info Detail Spesifik	-
Other Version/Related	Tidak tersedia versi lain
Lampiran Berkas	Tidak Ada Data