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Essays In New Keynesian Monetary Policy, Tzu-Hao Huang

Dissertations, Theses, and Capstone Projects

The dissertation consists of three Chapters. I consider New Keynesian models which involve tradeoffs between output gap and inflation variances. Such policy strategy is often referred to as flexible inflation targeting rules (e.g., Lars Svensson 2011, pp.1238-95). Taylor rules, in general, have the symbolic expression 𝑖_t=𝜑_x𝑥_t+𝜑_𝜋𝜋_t+𝜑_g𝑔_t, where 𝑖_t is the nominal interest rate at period t, 𝑥_t is the target variable output gap at period t, 𝜋_t is the target variable inflation rate at period t, 𝑔_t is realized shock …