Monetary policy, Taylor´s rule and endogenous fluctuations

Luis Alberto Alonso González and Alfonso Palacio Vera
Additional contact information
Luis Alberto Alonso González: Departamento de Economía Aplicada III (Política Económica). Universidad Complutense de Madrid., https://www.ucm.es//departamento-de-economia-aplicada,-publica-y-politica
Alfonso Palacio Vera: Departamento de Economía Aplicada III (Política Económica). Universidad Complutense de Madrid., https://www.ucm.es//departamento-de-economia-aplicada,-publica-y-politica

No 99-19, Documentos de trabajo de la Facultad de Ciencias Económicas y Empresariales from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales

Abstract: The paper analyses the dynamic behaviour of an economy when the central bank (CB) implements an inflation targeting regime. For this purpose, a simple macroeconomic model is constructed and subjected to formal dynamic analysis. A first result is that, under certain conditions, the emergence of endogenous oscillations in the economy is a possible scenario. A second implication is that CBs face two main policy dilemmas: (i) the degree of gradualism adopted when setting the level of short-term interest rates and (ii) the desirability or otherwise of raising interest rates as soon as economic indicators suggest the emergence of inflationary pressures.

Keywords: Política monetaria; Regla de Taylor. (search for similar items in EconPapers)
Pages: 19 pages
Date: 1999
References: Add references at CitEc
Citations:

Downloads: (external link)
https://eprints.ucm.es/id/eprint/6690/1/9919.pdf (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:ucm:doctra:99-19

Ordering information: This working paper can be ordered from
Facultad de Ciencias Económicas y Empresariales. Campus de Somosaguas, 28223 - POZUELO DE ALARCÓN (MADRID)
https://economicasye ... /working-papers-ccee

Access Statistics for this paper

More papers in Documentos de trabajo de la Facultad de Ciencias Económicas y Empresariales from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales Contact information at EDIRC.
Bibliographic data for series maintained by Águeda González Abad ().