Motta, Giorgio; Tirelli, Patrizio - Dipartimento di Economia, Metodi Quantitativi e … - 2010
We show that the combination rule-of-thumb consumers and consump- tion habits dramatically aspects the dynamic performance of DSGE mod- els, resurrecting Bilbiie's (2008) inverted Taylor principle. Another origi- nal contribution of the paper is the analysis of optimal operational simple rules...