Rule-of-thumb consumers and the design of interest rate rules
By: Jordi Gali, J. David Lopez-Salido, Javier Valles.
Contributors: López-Salido, J. David.; Vallés, Javier.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10392; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10392.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "We introduce rule-of-thumb consumers in an otherwise standard dynamic sticky price model, and show how their presence can change dramatically the properties of widely used interest rate rules.  In particular, the existence of a unique equilibrium is no longer guaranteed by an interest rate rule that satisfies the so called Taylor principle.  Our findings call for caution when using estimates of interest rate rules in order to assess the merits of monetary policy in specific historical periods"--National Bureau of Economic Research web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 1/14/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.