This paper studies stabilization effects of fiscal and monetary policy rules in the context of a standard real business cycle model with money. We assume that the fiscal authority adjusts the rate of income tax subject to the balanced-budget constraint, while the monetary authority controls the...

This paper studies a simple monetary model with a Ricardian fiscal policy in which equilibria are indeterminate if monetary policy consists solely of a rule for fixing the short-term interest rate. We introduce explicitly into the model the agents’ expectations of inflation which create the...

This paper re-examines equilibrium determinacy under the interest-rate control rules in a simple model of endogenous growth. We use a standard money-in-the-utility formulation with fixed labor supply and an Ak technology under which the balanced-growth path is unique and money is superneutral in...

This paper re-examines equilibrium determinacy under the interest-rate control rules in a simple model of endogenous growth. We use a standard money-in-the-utility formulation with fixed labor supply and an Ak technology under which the balanced-growth path is unique and money is superneutral in...

New-Keynesian models are characterized by the presence of expectations as explanatory variables. To use these models for policy evaluation, the econometrician must estimate the parameters of expectation terms. Standard estimation methods have several drawbacks, including possible lack of...

New-Keynesian models are characterized by the presence of expectations as explanatory variables. To use these models for policy evaluation, the econometrician must estimate the parameters of expectation terms. Standard estimation methods have several drawbacks, including possible lack of...