Determinacy, stock market dynamics and monetary policy inertia

Damjan Pfajfar; Emiliano Santoro

doi:10.1016/j.econlet.2011.02.033

Determinacy, stock market dynamics and monetary policy inertia

Damjan Pfajfar
, Emiliano Santoro

Økonomisk Institut

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › peer review

Abstract

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.

Originalsprog	Engelsk
Tidsskrift	Economics Letters
Vol/bind	112
Udgave nummer	1
Sider (fra-til)	7-10
Antal sider	4
ISSN	0165-1765
DOI	https://doi.org/10.1016/j.econlet.2011.02.033
Status	Udgivet - 2011

Bibliografisk note

JEL classification: C62, E52

Emneord

Asset prices
Determinacy
Monetary policy inertia

Adgang til dokumentet

10.1016/j.econlet.2011.02.033

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Citationsformater

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title = "Determinacy, stock market dynamics and monetary policy inertia",

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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.

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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

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JO - Economics Letters

JF - Economics Letters

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