Optimal Interest-Rate Setting in a Dynamic IS/AS Model
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Optimal Interest-Rate Setting in a Dynamic IS/AS Model. / Jensen, Henrik.
2011Teaching note.Research output: Other contribution › Net publication - Internet publication › Education
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TY - ICOMM
T1 - Optimal Interest-Rate Setting in a Dynamic IS/AS Model
AU - Jensen, Henrik
PY - 2011/4
Y1 - 2011/4
N2 - This note deals with interest-rate setting in a simple dynamic macroeconomic setting. The purpose is to present some basic and central properties of an optimal interest-rate rule. The model framework predates the New-Keynesian paradigm of the late 1990s and onwards (it is accordingly dubbed “Old-Keynesian” by, e.g., Cochrane, 2011), but the simplicity of the framework allows clear-cut results to be stated, and fundamental properties of infl‡ation-targeting regimes to be analyzed.The exposition builds to some extent on Svensson (1997) and Walsh (2003, Section10.4.2), and merges these presentations into one model.
AB - This note deals with interest-rate setting in a simple dynamic macroeconomic setting. The purpose is to present some basic and central properties of an optimal interest-rate rule. The model framework predates the New-Keynesian paradigm of the late 1990s and onwards (it is accordingly dubbed “Old-Keynesian” by, e.g., Cochrane, 2011), but the simplicity of the framework allows clear-cut results to be stated, and fundamental properties of infl‡ation-targeting regimes to be analyzed.The exposition builds to some extent on Svensson (1997) and Walsh (2003, Section10.4.2), and merges these presentations into one model.
M3 - Net publication - Internet publication
ER -
ID: 33344789