Determinacy, stock market dynamics and monetary policy inertia
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Determinacy, stock market dynamics and monetary policy inertia. / Pfajfar, Damjan; Santoro, Emiliano.
In: Economics Letters, Vol. 112, No. 1, 2011, p. 7-10.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - Determinacy, stock market dynamics and monetary policy inertia
AU - Pfajfar, Damjan
AU - Santoro, Emiliano
N1 - JEL classification: C62, E52
PY - 2011
Y1 - 2011
N2 - We study equilibrium determinacy in a New-Keynesian model where the Central Bank responds to asset prices growth. Unlike Taylor-type rules that react to asset prices, the proposed alternative does not harm dynamic stability and in certain cases promotes determinacy by inducing interest-rate inertia.
AB - We study equilibrium determinacy in a New-Keynesian model where the Central Bank responds to asset prices growth. Unlike Taylor-type rules that react to asset prices, the proposed alternative does not harm dynamic stability and in certain cases promotes determinacy by inducing interest-rate inertia.
KW - Asset prices
KW - Determinacy
KW - Monetary policy inertia
U2 - 10.1016/j.econlet.2011.02.033
DO - 10.1016/j.econlet.2011.02.033
M3 - Journal article
VL - 112
SP - 7
EP - 10
JO - Economics Letters
JF - Economics Letters
SN - 0165-1765
IS - 1
ER -
ID: 33780789