TY  - BOOK
AU  - Gali,Jordi
AU  - Lopez-Salido,J.David
AU  - Valles,Javier
ED  - National Bureau of Economic Research.
TI  - Rule-of-Thumb Consumers and the Design of Interest Rate Rules
T2  - NBER working paper series
PY  - 2004///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - March 2004; Hardcopy version available to institutional subscribers
N2  - We introduce rule-of-thumb consumers in an otherwise standard dynamic sticky price model, and show how their presence can change dramatically the properties of widely used interest rate rules. In particular, the existence of a unique equilibrium is no longer guaranteed by an interest rate rule that satisfies the so called Taylor principle. Our findings call for caution when using estimates of interest rate rules in order to assess the merits of monetary policy in specific historical periods
UR  - https://www.nber.org/papers/w10392
UR  - http://dx.doi.org/10.3386/w10392
ER  -