A KEYNESIAN BASED ECONOMETRIC FRAMEWORK FOR STUDYING MONETARY POLICY RULES

摘要

In the framework of a Keynesian monetary macromodel we study the implications of targeting monetary aggregates or the interest rate. Whereas the former targets the inflation rate indirectly, via money supply, the latter, called the Taylor rule, implies direct inflation targeting. Our monetary macromodel exhibits: asset market clearing, disequilibrium in product and labor markets, sluggish price and quantity adjustments, two Phillips curves for wage and price dynamics, and a combination of adaptive and forward looking expectations. The estimated parameters of the model imply instability for its steady state which can be overcome by making monetary policy react more strongly to the inflation target or by introducing an institutionally given kink into the wage Phillips curve.