We propose a new interest rate rule that implements the optimal equilibrium and eliminates all indeterminacy in a …

postwar US macroeconomic data can be explained as the outcome of passive monetary policy, indeterminacy, and sunspot … allowing the parameters to fall both in the determinacy and indeterminacy regions. The estimates reveal large shares of agents … results confirm that macroeconomic data in the early windows are better explained by indeterminacy, while determinacy is …

The existing literature holds that the Taylor principle often leads to indeterminacy in New Keynesian models that allow … clears quickly but not instantaneously, determinacy is the norm. The threat of indeterminacy is limited to a tiny, irrelevant …

the high persistence of expected inflation under indeterminacy is found to account for the price puzzle observed in actual …

curve". The computation is performed both under equilibrium uniqueness and under indeterminacy. While under uniqueness the … indeterminacy a new result arises. We find that the tighter is the monetary policy, the higher is the inflation/output gap … volatility. This is due to impact of systematic monetary policy on inflation and output persistence. In fact, under indeterminacy …

omission in the VARs of a variable capturing the high persistence of expected inflation under indeterminacy is found to account …

interest rates increase aggregate demand, the Taylor principle leads to indeterminacy, and passive policy ensures a unique …