一般注記This paper investigates the impact of financial market imperfection on the condition of monetary policy rules in order for the determinacy of rational-expectations equilibrium. Financial market imperfection disturbs agents' intertemporal substitution in certain cases. If the financial market is so imperfect as to change the real interest sensitivity of aggregate demand into positive, then monetary policy rules based on the Taylor principle can lead to the indeterminacy of equilibrium as follows. First, the central bank need not respond to current inflation so aggressively as the Taylor principle for determinacy. Second, the central bank must not respond to expected inflation so aggressively. Third, that imperfection might be the case with real financial markets such as the Japanese market during the 1990s, then real central banks should not be so responsive to inflation as the Taylor principle.
関連情報JEL Classification: E31; E44; E52
連携機関・データベース国立情報学研究所 : 学術機関リポジトリデータベース(IRDB)(機関リポジトリ)