Monetary Policy with Single Instrument Feedback Rules

Adão, Bernardino; Correia, Isabel H.; Teles, Pedro

doi:10.2139/ssrn.642621

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Monetary Policy with Single Instrument Feedback Rules

24 Pages Posted: 5 Jan 2005

See all articles by Bernardino Adão

Isabel H. Correia

Bank of Portugal - Department of Economics; Centre for Economic Policy Research (CEPR)

Pedro Teles

Federal Reserve Bank of Chicago; Centre for Economic Policy Research (CEPR)

Date Written: November 2004

Abstract

We consider a standard cash in advance monetary model with flexible prices or prices set in advance and show that there are interest rate or money supply rules such that equilibria are unique. The existence of these single instrument rules depends on whether the economy has an infinite horizon or an arbitrarily large but finite horizon.

Keywords: Monetary policy, interest rate rules, unique equilibrium

JEL Classification: E40, E52, E58, E62, E63

Suggested Citation: Suggested Citation

Adão, Bernardino Manuel and Horta Correia, Isabel and Teles, Pedro, Monetary Policy with Single Instrument Feedback Rules (November 2004). Available at SSRN: https://ssrn.com/abstract=642621 or http://dx.doi.org/10.2139/ssrn.642621