Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/56919 
Year of Publication: 
2010
Series/Report no.: 
Jena Economic Research Papers No. 2010,093
Publisher: 
Friedrich Schiller University Jena and Max Planck Institute of Economics, Jena
Abstract: 
This paper identifies parameters responsible for welfare reversals when the basic New Keynesian model is approximated. In our setting, a reversal occurs when the Ramsey policy under timeless perspective commitment ceases to be dominant against the Taylor rule after approximating the model. We find that the parameters involved are the degree of persistence in the autoregressive shock process and the labor elasticity of real output.
Subjects: 
optimal monetary policy
approximations
welfare analysis
timeless perspective
JEL: 
E30
E52
E61
Document Type: 
Working Paper

Files in This Item:
File
Size
396.88 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.