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https://ah.nccu.edu.tw/handle/140.119/139781
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| Title: | Macroeconomic Instability and Targeting Rules for Monetary Policy in An Endogenously Growing Small Open Economy |
| Authors: | 賴廷緯 Lai, Ting-Wei Chen, Kuan-jen Lai, Ching-chong |
| Contributors: | 經濟系 |
| Date: | 2021-09 |
| Issue Date: | 2022-04-11 13:24:55 (UTC+8) |
| Abstract: | By using the feature that money can lower unit transaction costs, this paper develops a monetary endogenous growth model for a one-sector small open economy, and uses it to examine the possibility of the occurrence of belief-driven fluctuations. It is found that the emergence of belief-driven fluctuations is crucially related to targeting rules for monetary policy. More specifically, when the monetary authorities target the specific money growth rate, macroeconomic instability generated by belief-driven fluctuations can arise even if labor externalities are totally absent. This finding runs in sharp contrast to the Benhabib–Farmer assertion needed for the occurrence of belief-driven fluctuations. It is also found that, when the monetary authorities target the specific inflation rate, macroeconomic instability generated by belief-driven fluctuations can never prevail regardless of the extent of the unit transaction costs. |
| Relation: | Review of International Economics, Vol.29, No.4, pp.904-926 |
| Data Type: | article |
| DOI 連結: | https://doi.org/10.1111/roie.12514 |
| Appears in Collections: | [經濟學系] 期刊論文 |
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