Arbeitspapier
Rule-of-Thumb Consumers, Nominal Rigidities and the Design of Interest Rate Rules
This paper argues that, in the presence of nominal wage rigidities, the existence of Rule-of-Thumb agents and price rigidities does not cause a change in the Taylor Principle as suggested by Galí et al. (2004), and that the only rigidity relevant for this result is that faced by Rule-of-Thumb consumers. For doing so, a New-Keynesian model with Rule-of-Thumb agents is proposed. The model discriminates between both type of agents when defining wage rigidities, thus al- lowing to identify and measure the factors that affect the Taylor Principle, this also allows to drop complete markets for Rule-of-Thumb agents, and the simple use of non-separable utility functions in order to determine the incidence of the wealth effect when facing staggered wages.
- Sprache
-
Englisch
- Erschienen in
-
Series: IDB Working Paper Series ; No. IDB-WP-400
- Klassifikation
-
Wirtschaft
Computable General Equilibrium Models
Business Fluctuations; Cycles
Prices, Business Fluctuations, and Cycles: Forecasting and Simulation: Models and Applications
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Diaz, Sergio Ocampo
- Ereignis
-
Veröffentlichung
- (wer)
-
Inter-American Development Bank (IDB)
- (wo)
-
Washington, DC
- (wann)
-
2013
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Diaz, Sergio Ocampo
- Inter-American Development Bank (IDB)
Entstanden
- 2013
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