Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/56919
Authors: 
Sienknecht, Sebastian
Year of Publication: 
2010
Series/Report no.: 
Jena economic research papers 2010,093
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

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