An interest rate peg might be better than you think

Markus Hörmann and Andreas Schabert

Economics Letters, 2009, vol. 105, issue 2, 156-158

Abstract: Active interest rate policy is frequently recommended based on its merits in reducing macroeconomic volatility and being a simple device. Yet, it might be outperformed by an even simpler policy. A peg can be welfare-enhancing and can uniquely be implemented.

Keywords: Interest; rate; rules; Welfare; losses; Equilibrium; determinacy; Fundamental; solutions (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:105:y:2009:i:2:p:156-158

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