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Article
Estimated Interest Rate Rules: Do they Determine Determinacy Properties?
The B.E. Journal of Macroeconomics (2011)
  • Henrik Jensen, University of Copenhagen
Abstract

I demonstrate that econometric estimations of nominal interest rate rules may tell little, if anything, about an economy's determinacy properties. In particular, correct inference about the interest-rate response to inflation provides no information about determinacy. Instead, it could reveal whether optimal monetary policymaking is performed under discretion or commitment.

Keywords
  • monetary policy,
  • interest rate rules,
  • Taylor rules,
  • equilibrium determinacy,
  • discretion versus rules
Publication Date
May 6, 2011
Citation Information
Henrik Jensen. "Estimated Interest Rate Rules: Do they Determine Determinacy Properties?" The B.E. Journal of Macroeconomics Vol. 11 Iss. 1 (2011)
Available at: http://works.bepress.com/hjeconomics/1/