linking interest rates to forecasts of future inflation. Such rules have been found to give rise to aggregate fluctuations due … properties of interest-rate rules whereby the central bank responds to a measure of past inflation. The consensus view that has … inflation are likely to ensure global stability provided that the coefficient on lagged interest rates is greater than unity …

linking interest rates to forecasts of future inflation. Such rules have been found to give rise to aggregate fluctuations due … properties of interest-rate rules whereby the central bank responds to a measure of past inflation. The consensus view that has … inflation are likely to ensure global stability provided that the coefficient on lagged interest rates is greater than unity. …

linking interest rates to forecasts of future inflation. Such rules have been found to give rise to aggregate fluctuations due … properties of interest-rate rules whereby the central bank responds to a measure of past inflation. The consensus view that has … inflation are likely to ensure global stability provided that the coefficient on lagged interest rates is greater than unity. …

This paper examines the properties of interest rate rules aimed at controlling aggregate price inflation. Policies are … compared in two models having either flexible or sticky inflation The latter is assumed to derive from a traditional, adaptive …-expectations augmented Phillips curve. The flexible inflation model derives from the modem view, due to Gray (1976) and Fischer (1977), that …

-type interest rate feedback rules. That is, rules whereby the nominal interest rate is set as an increasing function of inflation … with a slope greater than one around an intended inflation target. This paper shows that such rules can easily lead to … chaotic dynamics. The result is obtained for feedback rules that depend on contemporaneous or expected future inflation. The …

as an increasing function of the inflation rate induce aggregate instability by generating multiple equilibria. We show …

bound, that is, by threatening to set the nominal interest rate at a negative value should the inflation rate fall below a … inflation cannot be ruled out by lifting the zero bound on the monetary policy rule. This result obtains in models with flexible …

bound, that is, by threatening to set the nominal interest rate at a negative value should the inflation rate fall below a … inflation cannot be ruled out by lifting the zero bound on the monetary policy rule. This result obtains in models with flexible …

is, rules that respond to increases in inflation with a more than one-for-one increase in the nominal interest rate, are …