Capital and Macroeconomic Instabilty in a Discrete-Time Model With Forward-Looking Interest Rate Rules

2007 ◽  
Author(s):  
Kevin X. D. Huang ◽  
Qinglai Meng
Keyword(s):  
Interest Rate ◽  
Discrete Time ◽  
Time Model ◽  
Interest Rate Rules ◽  
Discrete Time Model ◽  
Forward Looking

MACROECONOMIC (IN)STABILITY OF INTEREST RATE RULES IN A MODEL WITH BANKING SYSTEM AND RESERVE MARKETS

2014 ◽  
Vol 19 (7) ◽  
pp. 1476-1508 ◽  
Author(s):  
Shu-Hua Chen
Keyword(s):  
Interest Rate ◽  
Discrete Time ◽  
Equilibrium Model ◽  
Banking System ◽  
Interest Rate Rules ◽  
Active Rules ◽  
Monetary Policies ◽  
Physical Investment ◽  
Monetary Rules ◽  
Forward Looking

This paper develops a general equilibrium model with a banking system and a reserves market and shows that (i) the macroeconomic stabilizing properties of the nominal interest rate rules change quite substantially when we move from a model without a banking system to one with a banking system and a reserves market; (ii) the interplay between fiscal and monetary policies, in particular inflation-indexed versus non-indexed bonds, is crucial in determining the macroeconomic stabilizing properties of monetary rules; (iii) active rules and passive rules perform equally in regard to their macroeconomic stabilizing properties; (iv) continuous- and discrete-time specifications deliver the same/different (in)determinacy results for both the labor-only model and the endogenous-capital model under forward-looking/current-looking rules; (v) the inclusion of physical investment narrows the indeterminacy region under forward-looking rules; and (vi) current-looking rules make equilibrium determinacy impossible for both the labor-only economy and the endogenous-capital economy. Economic intuitions are provided.

Non-homogeneous infinitely many sites discrete-time model with exact coalescent

2009 ◽  
Vol 33 (6) ◽  
pp. 713-732
Author(s):  
Adam Bobrowski ◽  
Marek Kimmel ◽  
Małgorzata Kubalińska
Keyword(s):  
Discrete Time ◽  
Time Model ◽  
Discrete Time Model
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