Chatelain, Jean-Bernard; Ralf, Kirsten - 2020
inflation and output gap. Else, the Taylor rule is identical to Ramsey optimal policy when there is zero public debt. The …In the discrete-time new-Keynesian model with public debt, Ramsey optimal policy eliminates the indeterminacy of simple … public debt volatility is taken into account into the loss function, the interest rate responds to public debt besides …