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Title:Trend growth and learning about monetary policy rules PDF Logo
Authors:Tesfaselassie, Mewael F.
Issue Date:2011
Series/Report no.:Kiel Working Papers 1744
Abstract:The paper examines the effect of trend productivity growth on the determinacy and learnability of equilibria under alternative monetary policy rules. It shows that under a policy rule that responds to current period inflation and the output gap a higher trend growth rate relaxes the conditions for determinacy and learnability. Results are mixed for other policy rules. Under the expectations-based rule, trend growth reduces the scope for determinacy but it relaxes the conditions for learnability. Under the lagged-data-based rule rule trend growth reduces the scope for determinacy and learnability.
Subjects:trend growth
learning
monetary policy
determinacy
expectational stability
JEL:E4
E5
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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