Buch

Interest-Rate Rules in a New Keynesian Framework with Investment

The last decades have witnessed major progress in both monetary policy theory and practice, with broad academic consensus on the desirability of monetary policy rules and ongoing research on their exact specification. Typically, the analysis is carried out in a New Keynesian framework with nominal rigidities and constant capital stock. The latter represents a constraint that this study seeks to overcome by introducing a model with investment and capital adjustment costs. The work assesses different interest-rate rule specifications with respect to the target variables included, based on two criteria: determinacy of rational-expectations equilibrium and convergence to steady state after a shock. The study concludes that rules with both an inflation and an output gap target ensure a unique rational-expectations equilibrium and a less distressful adjustment of the economy after the occurrence of shocks.

ISBN
978-3-653-01444-0

Language
Englisch

Bibliographic citation
Series: Schriften zur Wirtschaftstheorie und Wirtschaftspolitik ; No. 44

Classification
Wirtschaft

Event
Geistige Schöpfung
(who)
Pavlova, Elena
Event
Veröffentlichung
(who)
Peter Lang International Academic Publishers
(where)
Frankfurt a. M.
(when)
2012

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Buch

Associated

  • Pavlova, Elena
  • Peter Lang International Academic Publishers

Time of origin

  • 2012

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