Arbeitspapier
Determinacy in new Keynesian models: A role for money after all?
The New-Keynesian Taylor-Rule model of inflation determination with no role for money is incomplete. As Cochrane (2007a) argues, it has no credible mechanism for ruling out bubbles and as a result fails to provide a reason for private agents to pick a unique stable path. We propose a way forward. Our proposal is in effect that the New-Keynesian model should be formulated with a money demand and money supply function. It should also embody a terminal condition for money supply behaviour. If an unstable path occurred the central bank would switch to a money supply Rule explicitly designed to stop it via the terminal condition. This would be therefore a threat/trigger strategy complementing the Taylor Rule - only to be invoked if inflation misbehaved. Thus we answer the criticisms levelled at the Taylor Rule that it has no credible mechanism for ruling out bubbles. However it does imply that money cannot be avoided in the new Keynesian set-up, contrary to Woodford (2008).
- Sprache
-
Englisch
- Erschienen in
-
Series: Cardiff Economics Working Papers ; No. E2009/21
- Klassifikation
-
Wirtschaft
Price Level; Inflation; Deflation
Monetary Policy
Central Banks and Their Policies
- Thema
-
New-Keynesian
Taylor Rule
Determinacy
Geldpolitik
Taylor-Regel
Geldangebot
Geldnachfrage
Inflationsrate
Bubbles
Neukeynesianische Makroökonomik
Geldtheorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Minford, Patrick
Srinivasan, Naveen
- Ereignis
-
Veröffentlichung
- (wer)
-
Cardiff University, Cardiff Business School
- (wo)
-
Cardiff
- (wann)
-
2009
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Minford, Patrick
- Srinivasan, Naveen
- Cardiff University, Cardiff Business School
Entstanden
- 2009
Ähnliche Objekte (12)
Can the learnability criterion ensure determinacy in New Keynesian models?
Where next for monetary policy? Lessons from the financial crisis and the pandemic
Post-Brexit realism and international law: Renegotiating a bad Withdrawal Agreement
Commentary on economic projections and rules of thumb for monetary policy (by Athanasios Orphanides and Volker Wieland)
Understanding UK trade agreements with the EU and other countries
The banking crisis: A rational interpretation
A note rebutting the recent Cambridge Econometrics assessment of Brexit on the UK and London economies: Commissioned by London Mayor Khan
Free Trade under Brexit: Why its benefits have been widely underestimated
The effects of Brexit on the UK economy
Evaluating European trading arrangements
Evaluation and indirect inference estimation of inattentive features in a New Keynesian framework
Can a small New Keynesian model of the world economy with risk-pooling match the facts?
Can the learnability criterion ensure determinacy in New Keynesian models?
Where next for monetary policy? Lessons from the financial crisis and the pandemic
Post-Brexit realism and international law: Renegotiating a bad Withdrawal Agreement
Commentary on economic projections and rules of thumb for monetary policy (by Athanasios Orphanides and Volker Wieland)
Understanding UK trade agreements with the EU and other countries
The banking crisis: A rational interpretation
A note rebutting the recent Cambridge Econometrics assessment of Brexit on the UK and London economies: Commissioned by London Mayor Khan
Free Trade under Brexit: Why its benefits have been widely underestimated
The effects of Brexit on the UK economy
Evaluating European trading arrangements
Evaluation and indirect inference estimation of inattentive features in a New Keynesian framework
Can a small New Keynesian model of the world economy with risk-pooling match the facts?
Can the learnability criterion ensure determinacy in New Keynesian models?
Where next for monetary policy? Lessons from the financial crisis and the pandemic
Post-Brexit realism and international law: Renegotiating a bad Withdrawal Agreement
Commentary on economic projections and rules of thumb for monetary policy (by Athanasios Orphanides and Volker Wieland)
Understanding UK trade agreements with the EU and other countries
The banking crisis: A rational interpretation
A note rebutting the recent Cambridge Econometrics assessment of Brexit on the UK and London economies: Commissioned by London Mayor Khan
Free Trade under Brexit: Why its benefits have been widely underestimated
The effects of Brexit on the UK economy
Evaluating European trading arrangements
Evaluation and indirect inference estimation of inattentive features in a New Keynesian framework