We study how different types of instrument rules affect the outcome of a monetary policy game between the central bank and the private sector. Policy rules can be independent of output and a shock, functions of the shock, or functions of output. We rank the Nash equilibria generated by different...

In recent years economists have begun to use the techniques of non-linear dynamics to show that some apparently erratic and turbulent economic phenomena reflect subtle underlying patterns. How do cyclic and chaotic dynamics arise in economic models of equilibrium? How can empirical methods be...