Optimal monetary policy in a New Keynesian model with endogenous growth

Barbara Annicchiarico () and Lorenza Rossi

Journal of Macroeconomics, 2013, vol. 38, issue PB, 274-285

Abstract: We study optimal monetary policy in a New Keynesian (NK) model with endogenous growth and knowledge spillovers external to each firm. We find that, in contrast with the standard NK model, the Ramsey dynamics implies deviation from full inflation targeting in response to technology and government spending shocks, while the optimal operational rule is backward looking and responds to inflation and output deviations from their long-run levels.

Keywords: Monetary policy; Endogenous growth; Ramsey problem; Optimal simple rules (search for similar items in EconPapers)
JEL-codes: E32 E52 O42 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:38:y:2013:i:pb:p:274-285

DOI: 10.1016/j.jmacro.2013.10.001

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