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Cross-checking monetary policy and equilibrium determinacy under interest rate stabilization

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  • Ida, Daisuke

Abstract

Previous studies show that a smaller weight on the rule-based policy under a cross-checking monetary policy can easily achieve the unique rational expectations equilibrium. This result is turned over, however, when the central bank’s loss function contains interest rate stabilization as well as inflation and output stabilization.

Suggested Citation

  • Ida, Daisuke, 2019. "Cross-checking monetary policy and equilibrium determinacy under interest rate stabilization," Economics Letters, Elsevier, vol. 179(C), pages 75-77.
    • Handle: RePEc:eee:ecolet:v:179:y:2019:i:c:p:75-77
    DOI: 10.1016/j.econlet.2019.03.025
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    References listed on IDEAS

    as
    1. Bullard, James & Mitra, Kaushik, 2002. "Learning about monetary policy rules," Journal of Monetary Economics, Elsevier, vol. 49(6), pages 1105-1129, September.
    2. Tillmann, Peter, 2012. "Cross-checking optimal monetary policy with information from the Taylor rule," Economics Letters, Elsevier, vol. 117(1), pages 204-207.
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    More about this item

    Keywords

    Cross-checking monetary policy; Taylor principle; Determinacy; Interest rate stabilization;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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