Estimated Interest Rate Rules: Do They Determine Determinacy Properties?
27 Pages Posted: 11 Jan 2010
There are 2 versions of this paper
Estimated Interest Rate Rules: Do They Determine Determinacy Properties?
Date Written: November 2009
Abstract
No. I demonstrate that econometric estimations of nominal interest rate rules may tell little, if anything, about an economy's determinacy properties. In particular, correct inference about the interest-rate response to inflation provides no information about determinacy. Instead, it could reveal whether optimal monetary policymaking is performed under discretion or commitment.
Keywords: Equilibrium determinacy, Estimated Taylor rules, Interest rate rules, Monetary policy, Rules vs. discretion.
JEL Classification: E52, E58
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Inflation Determination With Taylor Rules: A Critical Review
-
The Observational Equivalence of Taylor Rule and Taylor-Type Rules
By Patrick Minford, Francesco Perugini, ...
-
Sophisticated Monetary Policies
By Andrew Atkeson, Varadarajan V. Chari, ...
-
Inflation Determination with Taylor Rules: Is New Keynesian Analysis Critically Flawed?
-
Determinacy in New Keynesian Models: A Role for Money after All?
By Patrick Minford and Naveen Srinivasan