ECIN Replication Package for "Inflation Targeting, Output Stabilization, and Determinacy in the Neoclassical Monetary Model with an Interest Rate Rule"

This paper studies determinacy conditions in the neoclassical monetary model where money enters utility and the production function and when the central bank follows an interest rate rule. In addition to inflation, I let the central bank respond to output too, a case empirically relevant but seemingly overlooked in the existing literature. I find that the determinacy conditions depend on the interest elasticity of output and that, generally, the Taylor principle is neither necessary nor sufficient for determinacy. This is in stark contrast with the New Keynesian model, where a sufficiently strong response to inflation or output leads to determinacy.<br><br>The replication package contains the data used for calibration and Matlab programs used to obtain determinacy regions numerically.