Nominal Interest Rate Pegging Under Alternative Expectations Hypotheses.

Nominal interest rate pegging leads to instability in an IS-LM model with a vertical long-run Phillips curve and backward-looking inflation expectations. However, it does not lead to instability in several large multicountry econometric models, apparently primarily because these models have nonverti...

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Bibliografische gegevens
Coauteur: International Monetary Fund
Formaat: Tijdschrift
Taal:English
Gepubliceerd in: Washington, D.C. : International Monetary Fund, 1988.
Reeks:IMF Working Papers; Working Paper ; No. 1988/094
Online toegang:Full text available on IMF
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245 1 0 |a Nominal Interest Rate Pegging Under Alternative Expectations Hypotheses. 
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500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a Nominal interest rate pegging leads to instability in an IS-LM model with a vertical long-run Phillips curve and backward-looking inflation expectations. However, it does not lead to instability in several large multicountry econometric models, apparently primarily because these models have nonvertical long-run Phillips curves. Nominal interest rate pegging leads to price level and output indeterminacy in a model with staggered contracts and rational expectations. However, when a class of money supply rules with interest rate smoothing is introduced, and interest rate pegging is viewed as the limit of interest rate smoothing, the price level and output are determinate. 
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830 0 |a IMF Working Papers; Working Paper ;  |v No. 1988/094 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/1988/094/001.1988.issue-094-en.xml  |z IMF e-Library