Taylor rules and technology shocks

Eric Sims ()

Economics Letters, 2012, vol. 116, issue 1, 92-95

Abstract: In New Keynesian models, Taylor rules move real rates in the same direction as the natural rate, but less than one-for-one. Permanent, positive technology shocks raise the natural rate—policy is expansionary and hours rise relative to the flexible price case.

Keywords: Taylor rules; Technology shocks; New Keynesian model (search for similar items in EconPapers)
JEL-codes: E30 E40 E50 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:116:y:2012:i:1:p:92-95

DOI: 10.1016/j.econlet.2012.01.016

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