Nonlinear monetary policy rules in a pure exchange overlapping generations model

Agliari, Anna; Naimzada, Ahmad; Pecora, Nicolò

doi:10.1007/s00191-017-0522-8

Cited by 3 publications

(1 citation statement)

References 44 publications

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“…Such regimes are, on the other hand, typically studied locally and 'in isolation' by the standard literature (e.g., Leeper, 1991;Woodford, 2003). The approach developed in this paper is thus along the lines of the evolutionary macroeconomic model recently elaborated by Agliari, Naimzada and Pecora (2017), which is, however, entirely focused on the dynamic implications of nonlinear monetary policy rules. Second, the nonlinear rule-guided policy behavior gives rise to a nonlinear economic system that exhibits multiple equilibria.…”

Section: Related Literature and Model Choicementioning

confidence: 99%

Nonlinear policy behavior, multiple equilibria and debt-deflation attractors

Piergallini

2018

J Evol Econ

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This paper analyzes global dynamics in a macroeconomic model where both monetary and fiscal policies are nonlinear, consistent with empirical evidence. Nonlinear monetary policy, in which the nominal interest rate features an increasing marginal reaction to inflation, interacting with nonlinear fiscal policy, in which the primary budget surplus features an increasing marginal reaction to debt, gives rise to four steady-state equilibria. Each steady state exhibits in its neighborhood a pair of 'active'/'passive' monetary/fiscal policiesà la Leeper-Woodford, and is typically investigated in isolation within linearized monetary models. We show that, when global nonlinear dynamics are taken into account, such steady states are endogenously connected. In particular, the global dynamics reveals the existence of infinite self-fulfilling paths that originate around the steady states locally displaying either monetary or fiscal 'dominance'-and thus locally delivering equilibrium determinacy-as well as around the unstable steady state with active monetary-fiscal policies, and that converge into an unintended high-debt/low-inflation (possibly deflation) attractor. Such global trajectories-bounded by two heteroclinic orbits connecting the three out-of-the-trap steady states-are, however, obscured if the four monetary-fiscal policy mixes are studied locally and disjointly.JEL Classification : E52; E62; E63; D91; C61; C62.

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Section: Related Literature and Model Choicementioning

confidence: 99%

Nonlinear policy behavior, multiple equilibria and debt-deflation attractors

Piergallini

2018

J Evol Econ

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Dynamic analysis of airline bidding game based on nonlinear cost

Liu

Zhou

et al. 2021

Physica A: Statistical Mechanics and its Applications

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Chaotic Behaviour in Two-parameter Family of Transcendental Functions Associated with Exponential Map

Sajid¹,

Alsuwaiyan²

2020

Int J Math, Eng, Manag Sci

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This article is devoted to the study of chaos and bifurcation in the real dynamics of a newly proposed two-parameter family of transcendental functions. We assume that one parameter is continuous and other parameter is discrete. For certain parameters, the theoretical computations of the real fixed points of a family of functions are given. The numerical simulations of the real periodic points of functions are described. The bifurcation diagrams of the real dynamics of these functions for some selected parameter values are provided. In these bifurcation diagrams, the period-doubling occurs which proceeds to a pathway toward chaos in the dynamics of functions. Further, the periodic-three window is visible in the bifurcation diagrams which implies chaos. Lastly, chaos is quantified in the dynamics of functions by calculating Lyapunov exponents.

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Nonlinear monetary policy rules in a pure exchange overlapping generations model

Cited by 3 publications

References 44 publications

Nonlinear policy behavior, multiple equilibria and debt-deflation attractors

Nonlinear policy behavior, multiple equilibria and debt-deflation attractors

Dynamic analysis of airline bidding game based on nonlinear cost

Chaotic Behaviour in Two-parameter Family of Transcendental Functions Associated with Exponential Map

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