What We Don't Know About the Monetary Transmission Mechanism and Why We Don't Know It
Roger Farmer and
Andreas Beyer ()
No 4811, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Abstract:
We study identification in a class of linear rational expectations models. For any given exactly identified model, we provide an algorithm that generates a class of equivalent models that have the same reduced form. We use our algorithm to show that a model proposed by Benhabib and Farmer [1] is observationally equivalent to the standard new-Keynesian model when observed over a single policy regime. However, the two models have different implications for the design of an optimal policy rule.
Keywords: Benhabib-farmer model; New-keynesian model; Indeterminacy; Identification (search for similar items in EconPapers)
JEL-codes: C39 C62 D51 E52 E58 (search for similar items in EconPapers)
Date: 2004-12
New Economics Papers: this item is included in nep-cba, nep-fmk, nep-mac and nep-mon
References: Add references at CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://cepr.org/publications/DP4811 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
Related works:
Journal Article: WHAT WE DON'T KNOW ABOUT THE MONETARY TRANSMISSION MECHANISM AND WHY WE DON'T KNOW IT (2008) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:4811
Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP4811
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().