Price indexation, habit formation, and the Generalized Taylor Principle

B-Tier
Journal: Journal of Economic Dynamics and Control
Year: 2014
Volume: 48
Issue: C
Pages: 218-225

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We prove that the Generalized Taylor Principle, under which the nominal interest rate reacts more than one-for-one to a change in inflation in the long run, is a necessary and (under some extra mild restrictions on parameters) sufficient condition for determinacy in a sticky price model with interest rate smoothing in monetary policy, partial dynamic price indexation, and habit formation in consumption.

Technical Details

RePEc Handle
repec:eee:dyncon:v:48:y:2014:i:c:p:218-225
Journal Field
Macro
Author Count
3
Added to Database
2026-01-24