Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/106009
Authors: 
Flaschel, Peter
Franke, Reiner
Proaño, Christian
Year of Publication: 
2008
Series/Report no.: 
IMK Working Paper 11/2008
Abstract: 
This paper shows that an analytical determinacy analysis of the baseline New Keynesian model with both staggered wages and prices developed by Erceg, Henderson and Levin (2000) is possible despite the high dimensional nature of this model. It is possible if the formulation of the model is translated from discrete to continuous time. Our findings corroborates in an analytical manner Galí's (2008) numerical findings regarding the determinacy frontier and the Taylor principle for this model type, where a generalized Taylor rule that employs a weighted combination of wage and price inflation is used as a measure for the inflation gap.
Subjects: 
Period models
continuous time
(in)determinacy.
JEL: 
E24
E31
E32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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