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dc.contributor.authorMichl, Thomas R.en_US
dc.description.abstractThis paper elaborates a simple model of growth with a Taylor-like monetary policy rule that includes inflation-targeting as a special case. When the inflation process originates in the product market, inflation-targeting locks in the unemployment rate prevailing at the time the policy matures. Although there is an apparent NAIRU and Phillips curve, this long run position depends on initial conditions; in the presence of stochastic shocks, it would be path dependent. Even with an employment target in the Taylor Rule, the monetary authority will generally achieve a steady state that misses both its targets since there are multiple equilibria. With only one policy instrument, Tinbergen's Rule dictates that policy can only achieve one goal, which can take the form of a linear combination of the two targets.en_US
dc.publisher|aLevy Economics Institute of Bard College |cAnnandale-on-Hudson, NYen_US
dc.relation.ispartofseries|aWorking papers // The Levy Economics Institute |x444en_US
dc.subject.keywordInflation targetingen_US
dc.subject.keywordemployment targetingen_US
dc.subject.keywordTaylor ruleen_US
dc.titleTinbergen rules the Taylor Ruleen_US
dc.type|aWorking Paperen_US

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