Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/212115
Authors: 
Marzo, Massimiliano
Zagaglia, Paolo
Year of Publication: 
2008
Series/Report no.: 
Bank of Finland Research Discussion Papers 24/2008
Abstract: 
Canzoneri and Diba (2004) show that the Taylor principle is not a panacea for equilibrium determinacy in a model where bonds and money provide liquidity services to households. We consider a cashless New Keynesian model with two types of government bonds. One bond provides transaction services, whereas the other is used only as a store of value. We show that the Taylor principle is still sacrosanct, and that the results of Leeper (1991) are confirmed.
Subjects: 
monetary policy
fiscal policy
government bonds
determinacy
JEL: 
E52
C68
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-465-7
Document Type: 
Working Paper

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