John Barrdear at the Bank of England but posted an interesting paper, Garcia Schmidt in addition to Woodford, it changes the data construction of the criterion model to avoid the criterion model's problems.
Modifying the criterion New-Keynesian model to supersede firms' sum data in addition to viscous prices amongst flexible prices in addition to dispersed information, in addition to imposing mild in addition to plausible restrictions on the monetary authority's determination rule, produces the hitting results that (i) at that topographic point exists a unique in addition to globally stable steady-state charge per unit of measurement of inflation, despite the possibility of a lower jump on nominal involvement rates; in addition to (ii) inward the vicinity of steady-state, the toll degree is determinate (and non but the charge per unit of measurement of inflation), despite the fundamental banking company targeting inflation. ... The model admits a determinate, stable solution amongst no role for sunspot shocks when the monetary ascendance responds past times less than one-for-one to changes inward expected inflation, including nether an involvement charge per unit of measurement peg....I haven't read this ane notwithstanding either. I'm posting for anyone next these issues. Like Garcia Schmidt in addition to Woodford, I too promise that others volition read the papers in addition to attention to figure out if they actually operate equally advertised.
