EconPapers    
Economics at your fingertips  
 

Hopf Bifurcation from New-Keynesian Taylor Rule to Ramsey Optimal Policy

Jean-Bernard Chatelain () and Kirsten Ralf

Working Papers from HAL

Abstract: This paper compares different implementations of monetary policy in a new- Keynesian setting. We can show that a shift from Ramsey optimal policy under short term commitment (based on a negative-feed back mechanism) to a Taylor rule (based on a positive-feed back mechanism) corresponds to a Hopfbifurcation with opposite policy advice and a change of the dynamic properties. This bifurcation occurs because of the ad hoc assumption that interest rate is a forward-looking variable when policy targets (inflation and out put gap) a reforward-looking variables in the new-Keynesian theory.

Keywords: Bifurcations; Taylor rule; Taylor principle; new-Keynesian model; Ramsey optimal policy (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01549929v3
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13) Track citations by RSS feed

Downloads: (external link)
https://halshs.archives-ouvertes.fr/halshs-01549929v3/document (application/pdf)

Related works:
Journal Article: Hopf Bifurcation from New-Keynesian Taylor Rule to Ramsey Optimal Policy (2020) Downloads
Working Paper: Hopf Bifurcation from new-Keynesian Taylor rule to Ramsey Optimal Policy (2020) Downloads
Working Paper: Hopf Bifurcation from new-Keynesian Taylor rule to Ramsey Optimal Policy (2020) Downloads
Working Paper: Hopf Bifurcation from new-Keynesian Taylor rule to Ramsey Optimal Policy (2020) Downloads
Working Paper: Hopf Bifurcation from New-Keynesian Taylor Rule to Ramsey Optimal Policy (2020) Downloads
Working Paper: Hopf Bifurcation from new-Keynesian Taylor rule to Ramsey Optimal Policy (2017) Downloads
Working Paper: Hopf Bifurcation from new-Keynesian Taylor rule to Ramsey Optimal Policy (2017) Downloads
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:hal:wpaper:halshs-01549929

DOI: 10.2139/ssrn.2971227

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2021-08-04
Handle: RePEc:hal:wpaper:halshs-01549929