Alonso González, Alberto and Palacio Vera, Alfonso (1999) Monetary policy, Taylor's rule and endogenous fluctuations. [ Documentos de Trabajo de la Facultad de Ciencias Económicas y Empresariales; nº 19, 1999, ISSN: 2255-5471 ]
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Official URL: http://eprints.ucm.es/6690/
The paper analyses the dynamic behaviour of an economy when the central bank (CB) implements an inflation targeting regime. For this purpose, a simple macroeconomic model is constructed and subjected to formal dynamic analysis. A first result is that, under certain conditions, the emergence of endogenous oscillations in the economy is a possible scenario. A second implication is that CBs face two main policy dilemmas: (i) the degree of gradualism adopted when setting the level of short-term interest rates and (ii) the desirability or otherwise of raising interest rates as soon as economic indicators suggest the emergence of inflationary pressures.
|Item Type:||Working Paper or Technical Report|
|Uncontrolled Keywords:||Política monetaria; Regla de Taylor.|
|Series Name:||Documentos de Trabajo de la Facultad de Ciencias Económicas y Empresariales|
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|Deposited On:||30 Nov 2007|
|Last Modified:||22 Oct 2014 17:47|
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