EconPapers    
Economics at your fingertips  
 

Determinacy and sunspots in a nonlinear monetary model

Alessandra Cornaro () and Anna Agliari ()
Additional contact information
Alessandra Cornaro: DISCE, Università Cattolica

No dises1060, DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali from Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE)

Abstract: In this paper we analyze a basic sticky price model with monopolistic competition and price stickiness à la Calvo. Starting by the relations describing a general economic equilibrium model (see Woodford in Interest and Prices, Foundations of a Theory of Monetary Policy, The MIT Press, 2003), as it results from the optimizing behavior of the private agents, we provide a nonlinear model for the monetary policy analysis. This kind of model is a candidate for the existence of multiple equilibria, with a dependence of exogenous sunspots. We explore the stability of such a model combined with interest rate rules in order to investigate the determinacy of the model and we find, for some policy and elasticity parameters, the conditions under which it is possible.

Keywords: Monetary policy; Nonlinear models; Determinacy; Sunspots (search for similar items in EconPapers)
JEL-codes: E52 C62 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2010-02
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: Add references at CitEc
Citations: Track citations by RSS feed

Published in Review of Economics, March 2010, pages nn1-nn2

Downloads: (external link)
http://www.unicatt.it/dipartimenti/DISES/allegati/dises1060.pdf First version, 2010 (application/pdf)

Related works:
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:ctc:serie2:dises1060

Access Statistics for this paper

More papers in DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali from Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) Contact information at EDIRC.
Bibliographic data for series maintained by Francesco Timpano ().

 
Page updated 2020-07-04
Handle: RePEc:ctc:serie2:dises1060