Determinacy, stock market dynamics and monetary policy inertia

D. Pfajfar, E. Santoro

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We study equilibrium determinacy in a New-Keynesian model where the Central Bank responds to asset prices growth. Unlike Taylor-type rules that react to asset prices, the proposed alternative does not harm dynamic stability and in certain cases promotes determinacy by inducing interest-rate inertia.
Original languageEnglish
Pages (from-to)7-10
JournalEconomics Letters
Volume112
Issue number1
DOIs
Publication statusPublished - 2011

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Inertia
Determinacy
Stock market
Asset prices
Monetary policy
Market dynamics
New Keynesian model
Central bank
Interest rates
Equilibrium determinacy
Dynamic stability

Cite this

Pfajfar, D. ; Santoro, E. / Determinacy, stock market dynamics and monetary policy inertia. In: Economics Letters. 2011 ; Vol. 112, No. 1. pp. 7-10.
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Determinacy, stock market dynamics and monetary policy inertia. / Pfajfar, D.; Santoro, E.

In: Economics Letters, Vol. 112, No. 1, 2011, p. 7-10.

Research output: Contribution to journalArticleScientificpeer-review

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