Generalizing the Taylor Principle: Comment

摘要

In the conventional linear new Keynesian model, there may be bounded equilibria in addition to the minimal state variable equilibrium for some parameter configurations. These indeterminate equilibria are serially correlated and add additional volatility to the time paths of the interest rate, output, and inflation. Since the influential empirical papers of Richard Clarida, Jordi Gali and Mark Gertler (2000) and Lubik and Schorfheide (2004), such equilibria represent leading candidate explanations for US time series data in the period before the Volcker disinflation of 1979-1982.