Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53150
Authors: 
Tesfaselassie, Mewael F.
Year of Publication: 
2011
Series/Report no.: 
Kiel Working Paper 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

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