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Constant interest rate projections without the curse of indeterminacy: A note
Author(s) -
Galí Jordi
Publication year - 2009
Publication title -
international journal of economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 11
eISSN - 1742-7363
pISSN - 1742-7355
DOI - 10.1111/j.1742-7363.2008.00103.x
Subject(s) - economics , indeterminacy (philosophy) , mathematical economics , variety (cybernetics) , interest rate , constant (computer programming) , keynesian economics , curse , econometrics , mathematics , macroeconomics , philosophy , epistemology , computer science , statistics , theology , programming language
Constant interest rate projections are often criticized on the grounds that they are inconsistent with the existence of a unique equilibrium in a variety of forward‐looking models. This note shows how to construct constant interest rate projections that are not subject to that criticism, using a standard New Keynesian model as a reference framework.