Phelan, Christopher; Bassetto, Marco - Society for Economic Dynamics - SED - 2012
of the discounted commercial bills. In our paper, we study the extent to which setting a short-term interest rate can be … as a mapping from histories to actions. We then analyze the consequences of an interest-rate rule, where the central bank … bank in exchange for money, an interest-rate peg leads to multiple deterministic equilibria, one with low inflation and …