Constant interest rate projections without the curse of indeterminacy

Constant interest rate (CIR) projections are often criticized on the grounds that they are inconsistent with the existence of a unique equilibrium in a variety of forward-looking models. This note shows how to construct CIR projections that are not subject to that criticism, using a standard New Keynesian model as a reference framework.

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Year of publication:	2007-08
Authors:	Galí, Jordi
Institutions:	Department of Economics and Business, Universitat Pompeu Fabra
Subject:	Interest rate peg \| in.ation targeting \| conditional forecasts \| interest rate rules \| multiple equilibria

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Extent:	application/pdf
Series:	Economics Working Papers.
Type of publication:	Book / Working Paper
Classification:	E37 - Forecasting and Simulation ; E58 - Central Banks and Their Policies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005772117