Discouraging Deviant Behavior in Monetary Economics — by Lawrence Christiano, Yuta Takahashi

Discouraging Deviant Behavior in Monetary Economics — by Lawrence Christiano, Yuta Takahashi

https://ift.tt/2NGs5Kw

Discouraging Deviant Behavior in Monetary Economics

NBER Working Paper No. 24949
Issued in August 2018
NBER Program(s):Economic Fluctuations and Growth

We consider a model in which monetary policy is governed by a Taylor rule. The model has a unique equilibrium near the steady state, but also has other equilibria. The introduction of a particular escape clause into monetary policy works like the Taylor principle to exclude the other equilibria. We reconcile our finding about the escape clause with the sharply different conclusion reached in Cochrane (2011). Atkeson et al. (2010) study a different version of the escape clause policy, but that version is fragile in that it lacks a crucial robustness property.

You may purchase this paper on-line in .pdf format

from SSRN.com ($5) for electronic delivery.

Machine-readable bibliographic record –
MARC,
RIS,
BibTeX

Document Object Identifier (DOI): 10.3386/w24949

PublishFinancevia National Bureau of Economic Research Working Papers https://ift.tt/1j89DVYSeptember 3, 2018 at 03:32PM https://ift.tt/1aNsfVT https://ift.tt/1j89DVY https://ift.tt/2NGs5Kw

Be the first to comment

Leave a Reply

Your email address will not be published.


*