Please use this identifier to cite or link to this item: https://ah.nccu.edu.tw/handle/140.119/139781


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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