Global and local determinacy in a one-step forward looking Newkeynesian model

Alessandra Cornaro; Anna Agliari

doi:10.1016/j.econmod.2011.02.025

Global and local determinacy in a one-step forward looking Newkeynesian model

Alessandra Cornaro, Anna Agliari

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Abstract

In this paper we consider a New Keynesian model for optimal monetary policy in a staggered fashion. We provide the relations of a non linear model of general economic equilibrium, implementing a suitable Taylortype interest rate rule. We characterize the conditions that guarantee local determinacy and explore conditions under which local bifurcations of the target equilibrium may occur. Afterwards, we argue how local determinacy might be associated with global indeterminacy, providing some numerical examples.

Original language	English
Pages (from-to)	1354-1362.
Number of pages	9
Journal	Economic Modelling
Volume	Volume 28, Issue 3
DOIs	https://doi.org/10.1016/j.econmod.2011.02.025
Publication status	Published - 2011

Keywords

Local bifurcations
Nonlinear model
Taylor rule

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10.1016/j.econmod.2011.02.025

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title = "Global and local determinacy in a one-step forward looking Newkeynesian model",

abstract = "In this paper we consider a New Keynesian model for optimal monetary policy in a staggered fashion. We provide the relations of a non linear model of general economic equilibrium, implementing a suitable Taylortype interest rate rule. We characterize the conditions that guarantee local determinacy and explore conditions under which local bifurcations of the target equilibrium may occur. Afterwards, we argue how local determinacy might be associated with global indeterminacy, providing some numerical examples.",

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author = "Alessandra Cornaro and Anna Agliari",

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AU - Cornaro, Alessandra

AU - Agliari, Anna

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AB - In this paper we consider a New Keynesian model for optimal monetary policy in a staggered fashion. We provide the relations of a non linear model of general economic equilibrium, implementing a suitable Taylortype interest rate rule. We characterize the conditions that guarantee local determinacy and explore conditions under which local bifurcations of the target equilibrium may occur. Afterwards, we argue how local determinacy might be associated with global indeterminacy, providing some numerical examples.

KW - Local bifurcations

KW - Nonlinear model

KW - Taylor rule

KW - Local bifurcations

KW - Nonlinear model

KW - Taylor rule

UR - http://hdl.handle.net/10807/3416

U2 - 10.1016/j.econmod.2011.02.025

DO - 10.1016/j.econmod.2011.02.025

M3 - Article

SN - 0264-9993

VL - Volume 28, Issue 3

SP - 1354-1362.

JO - Economic Modelling

JF - Economic Modelling

ER -

Global and local determinacy in a one-step forward looking Newkeynesian model

Abstract

Keywords

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