DOLADO, J.J.; MARIA-DOLORES, R.; RUGE-MURCIA, Francisco J. - Département de Sciences Économiques, Université de … - 2003
This paper derives optimal monetary policy rules in setups where certainty equivalence does not hold because either central bank preferences are not quadratic, and/or the aggregate supply relation is nonlinear. Analytical results show that these features lead to sign and size asymmetries, and...