Ruling out unstable equilibria in New Keynesian models

A. Patrick Minford and Naveen Srinivasan

Economics Letters, 2011, vol. 112, issue 3, 247-249

Abstract: The Taylor rule is an incomplete description of monetary policy within a New Keynesian model. The NK model should be formulated with a money demand function and also embody a terminal condition on inflation explicitly designed to stop bubbles.

Keywords: New; Keynesian; Taylor; rule; Determinacy; Terminal; condition; Money; supply (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (4)

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