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ECIN Replication Package for "Inflation Targeting, Output Stabilization, and Determinacy in the Neoclassical Monetary Model with an Interest Rate Rule"

Name: ECIN Replication Package for "Inflation Targeting, Output Stabilization, and Determinacy in the Neoclassical Monetary Model with an Interest Rate Rule"
Published: 2024-06-05
License: https://creativecommons.org/licenses/by/4.0

Principal Investigator(s): View help for Principal Investigator(s) Konstantin Platonov, Loyola Marymount University

Version: View help for Version V1

Name	File Type	Size	Last Modified
replication_files			06/05/2024 03:17:PM
README.pdf	application/pdf	105.8 KB	06/05/2024 11:07:AM

Project Citation:

Platonov, Konstantin. ECIN Replication Package for “Inflation Targeting, Output Stabilization, and Determinacy in the Neoclassical Monetary Model with an Interest Rate Rule.” Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2024-06-05. https://doi.org/10.3886/E204682V1

Project Description

Summary:

This paper studies determinacy conditions in the neoclassical monetary model where money enters utility and the production function and when the central bank follows an interest rate rule. In addition to inflation, I let the central bank respond to output too, a case empirically relevant but seemingly overlooked in the existing literature. I find that the determinacy conditions depend on the interest elasticity of output and that, generally, the Taylor principle is neither necessary nor sufficient for determinacy. This is in stark contrast with the New Keynesian model, where a sufficiently strong response to inflation or output leads to determinacy.

The replication package contains the data used for calibration and Matlab programs used to obtain determinacy regions numerically.

Scope of Project

Subject Terms: macroeconomics; monetary policy; money; economic models

JEL Classification:
      E31 Price Level; Inflation; Deflation
      E32 Business Fluctuations; Cycles
      E58 Central Banks and Their Policies

Manuscript Number: ECIN-Sep-2023-0389

Geographic Coverage: United States

Time Period(s): 1997 – 2023

Collection Date(s): 6/4/2024 – 6/4/2024

Data Type(s): aggregate data; program source code

Methodology

Data Source: U.S. Bureau of Economic Analysis

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Published Versions

V2 [2024-08-02]

V1 [2024-06-05]

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