Housing and Monetary Policies in a Model with Price and Wage Rigidities
Date Issued
2008
Date
2008
Author(s)
Hsu, Yen-Lin
Abstract
We investigate whether monetary authorities should react to housing prices in a New Keyneisian DSGE model. We construct a New Keynesian closed economy where both price and wage rigidities exist and evaluate the performances of different interest rate rules. The results suggest that housing price inflation targeting outperforms price inflation targeting in terms of output and wage inflation stabilization. We also find that there is a trade-off between output variability and price variability in comparing housing price inflation targeting and wage inflation targeting.
Subjects
housing prices
New Keynesian
monetary policies
Type
thesis
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ntu-97-R95323031-1.pdf
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