Implementing Optimal Monetary Policy in New-Keynesian Models with Inertia

George Evans and Bruce McGough ()

The B.E. Journal of Macroeconomics, 2010, vol. 10, issue 1, 25

Abstract: We consider optimal monetary policy in New Keynesian models with inertia due to lagged effects of inflation and output. We characterize the conditions for the unconditionally optimal equilibrium and compare them with those identifying optimality from the timeless perspective. Implementation of optimal policy is considered via construction of suitable interest-rate rules. We characterize the collection of all interest-rate rules consistent with the optimal equilibrium, and we identify among them an expectations-based rule that guarantees uniqueness and stability under learning.

Keywords: monetary policy; Taylor rules; indeterminacy; E-stability (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://doi.org/10.2202/1935-1690.1763 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: Implementing Optimal Monetary Policy in New-Keynesian Models with Inertia (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejmac:v:10:y:2010:i:1:n:5

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejm/html

DOI: 10.2202/1935-1690.1763

Access Statistics for this article

The B.E. Journal of Macroeconomics is currently edited by Arpad Abraham and Tiago Cavalcanti

More articles in The B.E. Journal of Macroeconomics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().