Constant interest rate projections without the curse of indeterminacy

Jordi Galí

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Constant interest rate (CIR) projections are often criticized on the grounds that they are inconsistent with the existence of a unique equilibrium in a variety of forward-looking models. This note shows how to construct CIR projections that are not subject to that criticism, using a standard New Keynesian model as a reference framework.

Keywords: Interest rate peg; in.ation targeting; conditional forecasts; interest rate rules; multiple equilibria (search for similar items in EconPapers)
JEL-codes: E37 E58 (search for similar items in EconPapers)
Date: 2007-08, Revised 2008-02
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1057

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