Informational inertia and the Taylor principle

• 成果类型: Article
• 署名作者: Meyer-Gohde, Alexander; Tzaawa-Krenzler, Mary
• 署名单位: Goethe University Frankfurt; University of Oxford
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2026.106220
• 发表日期: 2026
• 关键词: optimal monetary-policy; rational-expectations; sticky information; rules; money; MODEL; inflation; RIGIDITY; prices; Determinacy

摘要

The Taylor principle, a more than one-for-one reaction of the nominal interest rate to inflation, is a central tenet of monetary policy to rule out self-fulfilling equilibria. The standard sticky-price model only holds this principle as a sufficient determinacy bound, with substitutes such as output-gap targeting available. We show that if the long-run Phillips curve is vertical, the Taylor principle is necessary and no amount of output-gap, output-growth, or forecast targeting can substitute for the vigorous response to inflation it prescribes. Sticky price models report determinacy bounds as generically model-dependent, nonlinear functions of model parameters. We find that models with vertical long-run Phillips curves share the same determinacy bounds despite differing short-run tradeoffs. These bounds are more conservative, placing tighter restrictions on monetary policy, and more robust, being independent of model-specific parameters and depending solely on monetary policy's reaction to current inflation.