DP4948 Monetary Policy with Single Instrument Feedback Rules

Author(s): Bernardino Adão, Isabel Correia, Pedro Teles
Publication Date: March 2005
Keyword(s): interest rate rules, monetary policy, unique equilibrium
JEL(s): E31, E40, E52, E58, E62, E63
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4948

We consider standard cash-in-advance monetary models and show that there are interest rate or money supply rules such that equilibria are unique. The existence of these single instrument rules depends on whether the economy has an infinite horizon or an arbitrarily large but finite horizon.