Money growth rules as stabilization policies in open economies

High degrees of relative risk aversion induces indeterminacy in cash-in-advance economies. In a small open economy context, this paper finds that endogenous money growth rules can pre-empt such sunspot equilibria in an open economy context. The most promising candidates are policies that actively target past inflation movements or aggregate demand as well as the expected price level.

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Year of publication:	2008
Authors:	Weder, Mark
Published in:	International Economic Journal. - Taylor & Francis Journals, ISSN 1016-8737. - Vol. 22.2008, 4, p. 525-537
Publisher:	Taylor & Francis Journals
Subject:	cash-in-advance economies \| Taylor rules \| sunspot equilibria

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005511642