Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/80213 
Year of Publication: 
2002
Series/Report no.: 
Working Paper No. 2002-25
Publisher: 
Brown University, Department of Economics, Providence, RI
Abstract: 
We consider a cash-in-advance economy under uncertainty in which monetary policy sets either short-term nominal interest rates or money supplies. We show that both the initial price level and the distribution of the inflation rate up to its expectation are indeterminate, regardless of the degree of competition or the flexibility of prices in commodity markets. This indeterminacy is not related to the stability of a deterministic steady state.
Subjects: 
sticky prices
monopolistic competition
monetary policy
uncertainty
indeterminacy.
JEL: 
D50
E31
E40
E50
Document Type: 
Working Paper

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