Title of article
Inflation determinationwithTaylorrules:Isnew-Keynesiananalysis critically flawed?
Author/Authors
Bennett T. McCallum، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2008
Pages
8
From page
1101
To page
1108
Abstract
Cochrane(2007) has stronglyquestionedthebasiceconomiclogicofcurrentmonetary
policy analysis,arguingthatNewKeynesian(NK)modelsimplyrationalexpectations
paths withexplosiveinflationthatdonotimplyexplosionsinrealvariablesrelevantfor
transversalityconditions.Consequently,theusuallogicdoesnotruleoutsolutionswith
explosiveinflation.Thatresultdoesnot,however,justifynegativeconclusionsaboutNK
analysis,foradifferentcriterionislogicallysatisfactory.Itisthat,tobeplausible,aRE
solution mustsatisfythepropertyofleast-squareslearnability.Adoptionofthis
criterionservestojustifyinprinciplethebulkofcurrentmainstreamanalysis
Keywords
DeterminacyTransversalityLearnabilityNew KeynesianExplosive
Journal title
Journal of Monetary Economics
Serial Year
2008
Journal title
Journal of Monetary Economics
Record number
846356
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