05/11/2012
Ano: 2008
Código: WPE – 119
Autores/Pesquisadores:
Abstract:
This paper investigates conditions for equilibrium determinacy under inflation-targeting interest-rate rules when the basic new Keynesian model is extended to incorporate real wage rigidity. I show that the introduction of real wage rigidity increases the determinacy region under forward-looking rules. Moreover, the Taylor principle continues to ensure equilibrium uniqueness under current-looking rules.
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