Article ID Journal Published Year Pages File Type
5060818 Economics Letters 2011 4 Pages PDF
Abstract
► We look at an NK model where the Central Bank reacts to asset prices growth. ► Reacting to asset prices growth translates into monetary policy gradualism. ► Inertia alleviates problems of REE indeterminacy observed for some Taylor rules. ► Responding to asset prices does not necessarily harm dynamic stability. ► In some cases it promotes equilibrium determinacy.
Keywords
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Preview
Determinacy, stock market dynamics and monetary policy inertia
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