PRICE RULES, WAGE INDEXING, AND OPTIMAL MONETARY-POLICY Academic Article uri icon

abstract

  • There has been a recent increased interest in a monetary price rule. This paper analyzes the efficiency of such a monetary rule within the context of a rational expectations macro model. We compare the price rule with the standard money rule and interest rate rule. We find that as the supply shock variance approaches zero the price rule dominates both a money and interest rate rule. We then investigate the efficiency of these alternative money rules when we allow wage indexation to the price level. 1988.

published proceedings

  • JOURNAL OF MACROECONOMICS

author list (cited authors)

  • BRADLEY, M. D., & JANSEN, D. W.

citation count

  • 4

complete list of authors

  • BRADLEY, MD||JANSEN, DW

publication date

  • January 1, 1988 11:11 AM