Interest Rate Rules and Nominal Determinacy

  title={Interest Rate Rules and Nominal Determinacy},
  author={Michael Dotsey and John H. Boyd},
  journal={Federal Reserve Bank of Richmond Research Publications},
  • M. DotseyJ. Boyd
  • Published 1 February 1990
  • Economics
  • Federal Reserve Bank of Richmond Research Publications
Monetary economists have recently begun a serious study of money supply rules that allow the Fed to adjustably peg the nominal interest rate under rational expectations. These rules vary from procedures that produce stationary nominal magnitudes to those that generate nonstationarities in nominal variables. Our paper investigates the determinacy properties of three representative interest rate rules. ; We use Blanchard and Kahn's solution technique as a starting point. It doesn't directly apply… 

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