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dc.contributor.authorEvans, George W.
dc.contributor.authorMcGough, Bruce
dc.date.accessioned2020-07-07T23:33:47Z
dc.date.available2020-07-07T23:33:47Z
dc.date.issued2018-08
dc.identifier249730758
dc.identifierd91ea14f-51b5-44e5-ae16-db270b51e384
dc.identifier85050200817
dc.identifier000439803400004
dc.identifier.citationEvans , G W & McGough , B 2018 , ' Interest rate pegs in New Keynesian models ' , Journal of Money, Credit and Banking , vol. 50 , no. 5 , pp. 939-965 . https://doi.org/10.1111/jmcb.12523en
dc.identifier.issn0022-2879
dc.identifier.urihttps://hdl.handle.net/10023/20215
dc.descriptionFinancial support from National Science Foundation Grant No. SES-1559209 is gratefully acknowledged.en
dc.description.abstractThe conventional policy perspective is that lowering the interest rate increases output and inflation in the short run, while maintaining inflation at a higher level requires a higher interest rate in the long run. In contrast, it has been argued that a Neo‐Fisherian policy of setting an interest‐rate peg at a fixed higher level will increase the inflation rate. We show that adaptive learning argues against the Neo‐Fisherian approach. Pegging the interest rate at a higher level will induce instability and most likely lead to falling inflation and output over time. Eventually, this would precipitate a change of policy.
dc.format.extent570405
dc.language.isoeng
dc.relation.ispartofJournal of Money, Credit and Bankingen
dc.subjectNeo-Fisherian policyen
dc.subjectExpectationsen
dc.subjectLearningen
dc.subjectStabilityen
dc.subjectHB Economic Theoryen
dc.subjectHG Financeen
dc.subjectNDASen
dc.subjectBDCen
dc.subjectR2Cen
dc.subject.lccHBen
dc.subject.lccHGen
dc.titleInterest rate pegs in New Keynesian modelsen
dc.typeJournal articleen
dc.contributor.institutionUniversity of St Andrews. School of Economics and Financeen
dc.identifier.doi10.1111/jmcb.12523
dc.description.statusPeer revieweden
dc.date.embargoedUntil2020-07-08


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