We use the New Keynesian continuous-time framework to theoretically investigate the effects of a lag in a central bank’s response to economic fluctuations (i.e., monetary policy lag) on local equilibrium determinacy. In the case of a policy without lag, equilibrium is indeterminate even though a central bank’s policy response is sufficiently active. However, in the case of a policy with lag, an active monetary policy can contribute to local equilibrium determinacy if the lag is modest.
| Published in |
International Journal of Economic Behavior and Organization (Volume 3, Issue 2-1)
This article belongs to the Special Issue Recent Developments of Economic Theory and Its Applications |
| DOI | 10.11648/j.ijebo.s.2015030201.14 |
| Page(s) | 15-22 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2015. Published by Science Publishing Group |
Money in the Production Function (MIPF) Model, Policy Lag, System of Delay Differential Equations, Monetary Policy Rule, Taylor Principle
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APA Style
Eiji Tsuzuki. (2015). Determinacy of Equilibrium in a New Keynesian Model with Monetary Policy Lag. International Journal of Economic Behavior and Organization, 3(2-1), 15-22. https://doi.org/10.11648/j.ijebo.s.2015030201.14
ACS Style
Eiji Tsuzuki. Determinacy of Equilibrium in a New Keynesian Model with Monetary Policy Lag. Int. J. Econ. Behav. Organ. 2015, 3(2-1), 15-22. doi: 10.11648/j.ijebo.s.2015030201.14
AMA Style
Eiji Tsuzuki. Determinacy of Equilibrium in a New Keynesian Model with Monetary Policy Lag. Int J Econ Behav Organ. 2015;3(2-1):15-22. doi: 10.11648/j.ijebo.s.2015030201.14
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Download@article{10.11648/j.ijebo.s.2015030201.14,
author = {Eiji Tsuzuki},
title = {Determinacy of Equilibrium in a New Keynesian Model with Monetary Policy Lag},
journal = {International Journal of Economic Behavior and Organization},
volume = {3},
number = {2-1},
pages = {15-22},
doi = {10.11648/j.ijebo.s.2015030201.14},
url = {https://doi.org/10.11648/j.ijebo.s.2015030201.14},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.s.2015030201.14},
abstract = {We use the New Keynesian continuous-time framework to theoretically investigate the effects of a lag in a central bank’s response to economic fluctuations (i.e., monetary policy lag) on local equilibrium determinacy. In the case of a policy without lag, equilibrium is indeterminate even though a central bank’s policy response is sufficiently active. However, in the case of a policy with lag, an active monetary policy can contribute to local equilibrium determinacy if the lag is modest.},
year = {2015}
}
TY - JOUR T1 - Determinacy of Equilibrium in a New Keynesian Model with Monetary Policy Lag AU - Eiji Tsuzuki Y1 - 2015/01/22 PY - 2015 N1 - https://doi.org/10.11648/j.ijebo.s.2015030201.14 DO - 10.11648/j.ijebo.s.2015030201.14 T2 - International Journal of Economic Behavior and Organization JF - International Journal of Economic Behavior and Organization JO - International Journal of Economic Behavior and Organization SP - 15 EP - 22 PB - Science Publishing Group SN - 2328-7616 UR - https://doi.org/10.11648/j.ijebo.s.2015030201.14 AB - We use the New Keynesian continuous-time framework to theoretically investigate the effects of a lag in a central bank’s response to economic fluctuations (i.e., monetary policy lag) on local equilibrium determinacy. In the case of a policy without lag, equilibrium is indeterminate even though a central bank’s policy response is sufficiently active. However, in the case of a policy with lag, an active monetary policy can contribute to local equilibrium determinacy if the lag is modest. VL - 3 IS - 2-1 ER -
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