Cross-checking monetary policy and equilibrium determinacy under interest rate stabilization

Daisuke Ida

Economics Letters, 2019, vol. 179, issue C, 75-77

Abstract: Previous studies show that a smaller weight on the rule-based policy under a cross-checking monetary policy can easily achieve the unique rational expectations equilibrium. This result is turned over, however, when the central bank’s loss function contains interest rate stabilization as well as inflation and output stabilization.

Keywords: Cross-checking monetary policy; Taylor principle; Determinacy; Interest rate stabilization (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:179:y:2019:i:c:p:75-77

DOI: 10.1016/j.econlet.2019.03.025

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