Price level determinacy and the choice of policy targets under rational expectations

Aliza Brezis, Edward K. Offenbacher

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

We show that in a conventional macro model with rational expectations, the government can use monetary policy to peg real interest rates, and still attain a determinate price level provided it also pegs some nominal policy variable, e.g., nominal expenditures.

Original languageEnglish
Pages (from-to)25-30
Number of pages6
JournalEconomics Letters
Volume13
Issue number1
DOIs
StatePublished - 1983
Externally publishedYes

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