Levine, Paul (contributor); McAdam, Peter (contributor); … - 2007
euro area model of Smets and Wouters (2003), and a quadratic approximation of the representative household’s utility as the …The objectives of this paper are : first, to quantify the stabilization welfare gains from commitment; second, to … examine how commitment to an optimal rule can be sustained as an equilibrium and third, to find a simple interest rate rule …