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Export Reference (APA) 
Gomes, O. (2010). Nonlinear inflation expectations and endogenous fluctuations. Czech Economic Review. 4 (3), 263-280
Export Reference (IEEE) 
O. M. Gomes,  "Nonlinear inflation expectations and endogenous fluctuations", in Czech Economic Review, vol. 4, no. 3, pp. 263-280, 2010
Export BibTeX 
@article{gomes2010_1715933383047,
	author = "Gomes, O.",
	title = "Nonlinear inflation expectations and endogenous fluctuations",
	journal = "Czech Economic Review",
	year = "2010",
	volume = "4",
	number = "3",
	pages = "263-280",
	url = "http://auco.cuni.cz/mag/article/show/id/93"
}
Export RIS 
TY  - JOUR
TI  - Nonlinear inflation expectations and endogenous fluctuations
T2  - Czech Economic Review
VL  - 4
IS  - 3
AU  - Gomes, O.
PY  - 2010
SP  - 263-280
SN  - 1802-4696
UR  - http://auco.cuni.cz/mag/article/show/id/93
AB  - The standard new Keynesian monetary policy problem is, in its original presentation, a linear model. As a result, only three possibilities are admissible in terms of long term dynamics: the equilibrium may be a stable node, an unstable node or a saddle point. Fixed point stability (a stable node) is generally guaranteed only under an active monetary policy rule. The benchmark model also considers extremely simple assumptions about expectations (perfect foresight is frequently assumed). In this paper, one inquires how a change in the way inflation expectations are modelled implies a change in monetary policy results when an active Taylor rule is taken. By assuming that inflation expectations are constrained by the evolution of the output gap, we radically modify the implications of policy intervention: endogenous cycles, of various periodicities, and chaotic motion will be observable for reasonable parameter values.
ER  -