Monetary policy, stock prices, and consumption externalities

We study interest rate rules responding to stock prices in a sticky-price sticky-wage New-Keynesian framework subject to consumption externalities. For given wage rigidity, such rules are beneficial to equilibrium determinacy if households’ preferences feature sufficiently strong keeping-up-with-the-Joneses externalities.

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Year of publication:	2013
Authors:	Airaudo, Marco
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 120.2013, 3, p. 537-541
Publisher:	Elsevier
Subject:	Consumption externalities \| New-Keynesian model \| Stock prices \| Monetary policy \| Determinacy

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Type of publication:	Article
Classification:	E4 - Money and Interest Rates ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010681746