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http://hdl.handle.net/10419/25297
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| Title: | | The natural rate hypothesis and real determinacy  |
| Authors: | | Meyer-Gohde, Alexander |
| Issue Date: | | 2008 |
| Series/Report no.: | | SFB 649 discussion paper 2008,054 |
| Abstract: | | The uniqueness of bounded local equilibria under interest rate rules is analyzed in a model with sticky information `a la Mankiw and Reis (2002). The main results are tighter bounds on monetary policy than in sticky-price models, irrelevance of the degree of output-gap targeting for determinacy, independence of determinacy regions from parameters outside the interest-rate rule, and equivalence between real determinacy in models satisfying the natural rate hypothesis and nominal determinacy in the associated full-information, flex-price equivalent. The analysis follows from boundedness considerations on the nonautonomous recursion that describe the MA(\infty) representation of variables’ reaction to endogenous fluctuations. |
| Subjects: | | Nonautonomous difference equations indeterminacy Taylor rule sticky information sticky prices |
| JEL: | | C62 E31 E52 E58 E61 |
| Document Type: | | Working Paper |
| Appears in Collections: | | SFB 649 Discussion Papers, HU Berlin
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