Interest rate rules and macroeconomic stabilization

Mark Weder

No 2006025, Discussion Papers (REL - Recherches Economiques de Louvain) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: High degrees of relative risk aversion induce indeterminacy in cash-in-advance economies. This paper finds that Taylor-style policies can pre-empt such sunspot equilibria. Spécifie policy recommendations dépend on the fundamentals of the economy. i.e. the cmpirically true value of coefficient of relative risk aversion.

Keywords: Cash-in-advance economies; Taylor rules; sunspot equilibria (search for similar items in EconPapers)
JEL-codes: E32 E52 (search for similar items in EconPapers)
Pages: 20
Date: 2006-06-01
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Interest rate rules and macroeconomic stabilization (2006)
Working Paper: Interest Rate Rules and Macroeconomic Stabilization (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvre:2006025

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