Real Indeterminacy in Monetary Models with Nominal Interest Rate Distortions

B-Tier
Journal: Review of Economic Dynamics
Year: 2001
Volume: 4
Issue: 4
Pages: 767-789

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

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

Abstract

This paper demonstrates that in a standard flexible-price monetary model there exists real indeterminacy whenever the nominal interest rate moves too closely with either current or forecasted inflation. However, an aggressive response to lagged inflation will ensure determinacy. These conclusions are robust to a wide range of calibrations, and a monetary environment that allows for endogenous velocity. The results are affected by the inclusion of investment spending in the transactions constraint. (Copyright: Elsevier)

Technical Details

RePEc Handle
repec:red:issued:v:4:y:2001:i:4:p:767-789
Journal Field
Macro
Author Count
2
Added to Database
2026-01-25