Skip to content
Licensed Unlicensed Requires Authentication Published by De Gruyter March 1, 2016

House prices and monetary policy

Paulo Brito, Giancarlo Marini and Alessandro Piergallini


This paper analyzes global dynamics in an overlapping generations general equilibrium model with housing-wealth effects. It demonstrates that monetary policy cannot burst rational bubbles in the housing market. Under monetary policy rules of the Taylor-type, there exist global self-fulfilling paths of house prices along a heteroclinic orbit connecting multiple equilibria. From bifurcation analysis, the orbit features a boom (bust) in house prices when monetary policy is more (less) active. The paper also proves that booms or busts cannot be ruled out by interest-rate feedback rules responding to both inflation and house prices.

JEL: C61; C62; E31; E52

Corresponding author: Alessandro Piergallini, Department of Economics and Finance, Tor Vergata University, Via Columbia 2, 00133 Rome, Italy, Phone: +390672595431, Fax: +39062020500, e-mail:
aUECE (Research Unit on Complexity and Economics) is financially supported from national funds by FCT (Fundação para a Ciência e a Tecnologia), Portugal. This article is part of Strategic Project UID/ECO/00436/2013.


We are very grateful to an anonymous referee for many valuable comments and remarks. We also thank Paolo Canofari, Andrea Ferrero, Maurizio Fiaschetti, Ricardo Reis and participants to the 6th Annual Conference of the Portuguese Economic Journal, University of Porto, to the 54th Annual Conference of the Italian Economic Association, University of Bologna, and to the 2nd Macro Banking and Finance Workshop, University of Rome Tor Vergata, for very useful comments and suggestions. We gratefully acknowledge financial support from MIUR (Ministero dell’Istruzione, dell’Università e della Ricerca) and FCT (Fundação para a Ciência e a Tecnologia). The usual disclaimers apply.

Appendix A. Solution of the consumer’s problem

In the intertemporal optimization problem, the representative consumer born at time s chooses the optimal time path of total consumption, z̅(s, t), to maximize the lifetime utility function (2), given (6) and the constraints (3) and (4). Using the definition of total consumption, z̅(s, t)≡c̅(s, t)+R(t)m̅(s, t), and the optimal intratemporal condition (6), we can write

(49)logΛ(c¯(s,t),m¯(s,t))=logυ(t)+logz¯(s,t), (49)

where υ(t)Λ(Γ(R(t))Γ(R(t))+R(t),1Γ(R(t))+R(t)) is the same for all generations. Therefore, the intertemporal optimization problem can be formalized in the following terms:

(50)max{z¯(s,t),h¯(s,t)}0[α(logυ(t)+logz¯(s,t))+(1α)logh¯(s,t)]e(μ+ρ)tdt, (50)

subject to

(51)a¯˙(s,t)=(R(t)π(t)+μ)a¯(s,t)+y¯(s,t)τ¯(s,t)z¯(s,t)+[q˙(t)q(t)(R(t)π(t))]q(t)h¯(s,t), (51)

and given a̅(s, 0). The optimality conditions are

(52)z¯˙(s,t)=(R(t)π(t)ρ)z¯(s,t), (52)
(53)1ααz¯(s,t)=[(R(t)π(t))q˙(t)q(t)]q(t)h¯(s,t), (53)
(54)limta¯(s,t)e0t(R(j)π(j)+μ)dj=0. (54)

Therefore, the individual budget constraint (51) can be expressed as

(55)a¯˙(s,t)=(R(t)π(t)+μ)a¯(s,t)+y¯(s,t)τ¯(s,t)z¯(s,t)+[q˙(t)q(t)(R(t)π(t))]q(t)h¯(s,t)=(R(t)π(t)+μ)a¯(s,t)+y¯(s,t)z¯(s,t)1ααz¯(s,t)=(R(t)π(t)+μ)a¯(s,t)+y¯(s,t)1αz¯(s,t). (55)

Integrating forward (55), using the transversality condition (54) and (52), total consumption turns out to be a linear function of total wealth:

(56)z¯(s,t)=α(μ+ρ)(a¯(s,t)+k¯(s,t)), (56)

where k̅(s, t) is human wealth, defined as the present discounted value of after-tax labor income, k¯(s,t)t(y¯(s,t)τ¯(s,t))etv(R(j)π(j)+μ)djdv. From (6),

(57)z¯(s,t)=L(R(t))c¯(s,t), (57)

where L(R(t))≡1+R(t)/Γ(R(t)). Time-differentiating (57) yields

(58)z¯˙(s,t)=L(R(t))c¯(s,t)R˙(t)+L(R(t))c¯˙(s,t). (58)

Therefore, the dynamic equation for individual consumption is

(59)c¯˙(s,t)=(R(t)π(t)ρ)c¯(s,t)L(R(t))R˙(t)L(R(t))c¯(s,t). (59)

Appendix B. Aggregation

The per capita aggregate financial wealth is given by

(60)a(t)=βta¯(s,t)eβ(st)ds. (60)

Differentiating with respect to time yields

(61)a˙(t)=βa¯(t,t)βa(t)+βta¯˙(s,t)eβ(st)ds, (61)

where a̅(t, t) is equal to zero by assumption. Using (3) yields

(62)a˙(t)=βa(t)+μa(t)+(R(t)π(t))a(t)+y(t)τ(t)c(t)R(t)m(t)+[q˙(t)q(t)(R(t)π(t))]q(t)h(t)=(R(t)π(t)n)a(t)+y(t)τ(t)c(t)R(t)m(t)+[q˙(t)q(t)(R(t)π(t))]q(t)h(t). (62)

Using (11), the per capita aggregate consumption is given by

(63)c(t)=α(μ+ρ)L(R(t))(a(t)+k(t)), (63)

where k(t)=t(y(t)τ(t))etv(R(j)π(j)+μ)djdv is the per capita aggregate human wealth. Next differentiate with respect to time the definition of per capita aggregate consumption, to obtain

(64)c˙(t)=βc¯(t,t)βc(t)+βtc¯˙(s,t)eβ(st)ds. (64)

Note that c̅(t, t) denotes consumption of the newborn generation. Since a̅(t, t)=0, from (11) we have

(65)c¯(t,t)=α(μ+ρ)L(R(t))(k¯(t,t)). (65)

Using (12), (63) and (65) into (64) yields the time path of per capita aggregate consumption:

(66)c˙(t)=(R(t)π(t)ρ)c(t)L(R(t))R˙(t)L(R(t))c(t)αβ(ρ+μ)L(R(t))a(t). (66)

Appendix C. Proof of Proposition 1

Any equilibrium steady states, (R*, q*), are bounded points (R, q)∈(ℝ+, ℝ++) such that q˙=R˙=0 and the transversality condition holds if R*P(R*)>–μ. From equation (28), q˙=0 if and only if q=Ψ(R). From equation (29), R˙=0 if and only if R=0, because L′(0)=∞, or q=Φ(R). Therefore, there are two candidates for equilibrium steady states. First, we have R=0 and q=q0Ψ(0)=(1α)/(αP(0)) which constitute indeed an equilibrium point only if P(0)<0. In this case, the transversality condition is verified, because the condition –P(0)>–μ always holds. Second, from the condition q=Ψ(R)=Φ(R), there is a second candidate if the set {R≥0:Ψ(R)=Φ(R)>0} is non-empty. We have




and r=RP(R)>–μ from the transversality condition. Because β(1–α)(ρ+μ)>0, then r+>ρ>0>r. As L(R)>1, then the condition r>ρ must hold, which implies that the transversality condition is always met. Therefore, an equivalent condition for the existence of a second steady state is R1={R0:RP(R)=r+}. From the assumption that the monetary policy is globally active, RP(R) is monotonically increasing in R, which means that RP(R)∈[–P(0), +∞). Therefore, the steady state (R1,q1) exists if P(0)+r+≥0, where q1=Ψ(R1)=Φ(R1). As a result, there is multiplicity if 0>P(0)≥–r+, there is only one steady state (R1,q1) if P(0)>0, and there is only steady state (0,q0) if P(0)+r+<0. We set r*=r+.

Appendix D. Proof of Proposition 2

For the steady-state equilibrium (R,q)=(R1,q1), we have the trace and determinant of the Jacobian given by






yielding the eigenvalues λ1=2r*ρ>0 and λ2=(1P(R1))L(R1)/L(R1)>0 if the monetary policy is locally active, 1P(R1)>0. Then the steady state (R1,q1) is always a source.

Evaluating the trace and the determinant for equilibrium (R,q)=(0,q0), with q0=Ψ(0), we get






we have



Recall that this steady state exists only if P(0)<0, and observe that L′(0)=∞ and L″(0)/(L′(0))2=–∞. Then

trJ(0)=detJ(0)=(,if P(0)+r+>0+,if P(0)+r+<0

which means that the eigenvalues of the Jacobian are infinite and the steady state is singular. If P(0)+r+>0, the steady state is multiple (case (b) in Proposition 2) and is a kind of non-regular saddle point, and, if P(0)+r+<0, the steady state is unique (case (c) in Proposition 2) and is a kind of non-regular source. In any case, the flow approaches or diverges from (0,q0) at an infinite speed and is non-differentiable locally.

In order to study local dynamics, we can use several methods, such as, first, finding a de-singularized projection and studying its local dynamics, and, second, studying global dynamics.

If we use the first method, the natural way to remove the singularity introduced by L′(R) at R=0, would be to recast the system in variables (L, q),


where L≥1, R=R(L) is increasing and R(1)=0, R′(1)=0. However, in this case there is an unique steady state (L(R1),q1). Therefore, this method does not solve our de-singularization problem. We use the second method in the proof of Proposition 3. There, we show that the singular steady state (0,q0), for the case P(0)+r+>0 (i.e. case (b) in Proposition 2) behaves as a generalized saddle point.

Appendix E. Proof of Proposition 3

As the system (28)–(29) does not have an explicit solution, we must employ qualitative methods in order to study global dynamics. One possible method is to find a first integral of system (28)–(29), that is, a Lyapunov function V(·) such that V(R, q)=constant. We could not find this function. Another method is to determine a trapping area for the heteroclinic orbit. The rationale is the following: as the steady state (R1,q1) is a source, the unstable manifold is the set +/(R1,q1); as the steady state (0,q0) is a saddle point, the stable manifold is, locally, composed by a single trajectory belonging to ℝ+; therefore there is an intersection of the unstable manifold of the first point and of the stable manifold of the second which is non-empty. In order to prove that it exists, and to characterize it, we consider a trapping area for the heteroclinic orbit. In order to prove this, we start by determining the slopes of the heteroclinic orbit in the neighborhoods of the two equilibria, we build a trapping area enclosing the heteroclinic, and demonstrate that all the trajectories starting inside the trapping area escape from it, with the exception of those starting at any point along the heteroclinic orbit.

Appendix E.1. Slopes of the eigenspaces associated to the two equilibria

The unstable eigenspace 1u is the tangent space to the unstable manifold associated to equilibrium (R1,q1), in the space where (R,q)W+2 lie,


The unstable eigenspace 1u is the linear space which is tangent to W1u and is spanned by the eigenvectors (V1, 1) and (V2, 1) which are associated to eigenvalues λ1 and λ2, respectively, where


In general, V2>0 and the sign of V1 is ambiguous. Observe that the the slope of 1u,dqdR|1u, is the opposite to the slope of isocline q˙=0, locally at the steady state (R1,q1). Let us call 1,+u(1,u) the eigenspace related to the dominant (non-dominant) eigenvalue. The following conditions can be proved: (1) if r+>(1P(R1))L(R1)/L(R1), then 2r+ρ>(1P(R1))L(R1)/L(R1), which is equivalent to λ1>λ2, and therefore 1,+u={(R,q)W:(qq1)=V1(RR1)} and 1,u={(R,q)W:(qq1)=V2(RR1)}. In this case, V1<0 and V2>0 and the slope associated to the dominant eigenvalue is negative and the slope associated to the non-dominant eigenvalue is positive; (2) if λ1<λ2, which is equivalent to 2r+ρ<(1P(R1))L(R1)/L(R1), then r+<(1P(R1))L(R1)/L(R1), and 1,+u={(R,q)W:(qq1)=V2(RR1)} and 1,u={(R,q)W:(qq1)=V1(RR1)}. In this case, V1>V2>0 and the slope associated to the both eigenvalues are both positive, but the one associated with 1,u is steeper.

The stable manifold associated to steady state (0,q0) is defined as


However, we saw that the projection of the steady state (0,q0) in the space 𝒲 is singular. This means that the solution approaches the singular steady state asymptotically with an infinite speed. In order to characterize the dynamics in the space 𝒲 in the neighborhood of (0,q0), we have to take a different approach: observe that, as R′(1)=0, then a naïve calculation for the slope of the stable manifold in the neighborhood of the singular equilibria could be dq/dR=(r+ρ)/(αβ(ρ+μ)R′(1))=∞.

Instead, observe that along the singular surface R=0 we have R˙=0 and q˙=P(0)(Ψ(0)q). Then, from any point along this surface where qq0=Ψ(0), an unstable trajectory unfolds. This means that any trajectory coming from R>0 will be deflected away from the equilibrium point on hitting the surface R=0, with the exception of the one which converges to the equilibrium point (0,q0). The (global) direction of the vector field generated by equations (28)–(29) is given by

(67)dqdR|(q˙,R˙)=L(R)(RP(R))(qΨ(R))αβ(ρ+μ)(Φ(R)q). (67)

In order to determine the slope of the trajectory which converges to the singular steady state, we determine the slope of the vector field hitting the surface R=0 using equation (67). We have

dqdR|R=0=L(0)P(0)(qΨ(0))αβ(ρ+μ)(Φ(0)q)={,if qq00,if q=q0

because L′(0)=∞. Therefore, the stable manifold associated to the singular steady state (0,q0) is horizontal in the space 𝒲.

The heteroclinic orbit, Ω=W0sW1u, is tangent to a horizontal line in the neighborhood of the equilibrium point (0,q0) and is positively slopped in the neighborhood of (R1,q1), because it is tangent to 1,u.

Appendix E.2. Trapping area

Next we consider the case in which λ1<λ2, which is depicted in Figure 1. Recall that Ω is tangent to a line dq/dR=0 in the neighborhood of point (0,q0). Observe that, in the neighborhood of point (R1,q1), the slope of the eigenspace associated to the non-dominant eigenvalue (λ1) and of the isocline R˙=0 are both positive, but the former is less steep that the later because (see Figure 7)

Figure 7: Proof of Proposition 3.

Figure 7:

Proof of Proposition 3.


As the heteroclinic Ω is tangent to that eigenspace in the heighborhood of that equilibrium point, it will lie between the isocline R˙=0 and 1,u and will never cross this line.

This allows to consider the trapping area whose sides are given by the segment of the isocline q˙=0 between the two equilibria (recall that the two equilibria lay along this isocline), by a line passing through the steady state (R1,q1), whose slope is given by the eigenvector which is associated to the non-dominant eigenvalue and by the horizontal segment such that q=q0, between the q-axis and the previous eigenvector-line.

Formally, the trapping area [A, B, C] is defined by the vertices A(0,q0),B(R1,q1), and C(RC,q0)=(R1(q1q0)/V1,q0) and the sides (A,B)={(R,q)(0,R1)×(q1,q0):q˙=0},(A,C)={(R,q):R(0,R1),q=q0}, and (B,C)={(R,q)(R1,RC)×(q1,q0):q=q1+V1(RR1)}.

Next we have to demonstrate that the (global) direction of the vector field, given by equation (67), which is generated by equations (28)–(29), allows us to prove that all the trajectories hitting the three boundaries of the trapping exit the trapping area.

At side (A, B) we have q˙=0 and R˙<0, because


given the fact that –r<RP(R)<r+ if R[0,R1). Then, as the slope of the vector field in the interval is


then the vector field points globally out of the trapping area within (A, B) with a horizontal slope.

At side (A, C), the vector field corresponds to a horizontal line between point A and point C, which is in the intersection of a horizontal line passing through the q-axis and the direction defined by the eigenvector associated to the dominant eigenvalue at point B. These two lines meet at point C. Along (A, C), we have R˙<0 for R(0,Φ1(q0)),R˙=0 at point R=Φ1(q0) and R˙>0 for RΦ1(q0),RC, and, we have q˙>0 everywhere. As the slope of the vector field is given by

dqdR|(A,C)=L(R)(RP(R))(q0Ψ(R))αβ(ρ+μ)(Φ(R)q0){<0,if R(0,Φ1(q0)if R=Φ1(q0)>0,if R(Φ1(q0),RC)

then the vector field points globally out of the trapping area, at all points located at (A, C).

At side (B, C), which is a segment of the eigenspace 1,u between points (R1,q1) and (RC,q0), the vector field has local time-variations given by R˙>0 and q˙>0. As this side has a slope given by V1, then the trajectories exit the trapping area if the slope of the vector field is less steep than V1, that is, if and only if


The numerator is equivalent to


It is negative because R>R1 implies L(R)<L(R1),RP(R)>r+, q>Ψ(R), and because we assume L(R1)r+<L(R1)(1P(R1) from λ1<λ2. Then, all the trajectories reaching segment (B, C) will exit the trapping area.

Therefore, there is an unique trajectory starting from point B, (R1,q1), that does not hits the boundaries of the trapping area, and therefore converges to point A, (0,q0). This is the heteroclinic trajectory Ω, and it happens to cross the isocline R˙=0.

Appendix F. Proof of Proposition 4

We use the same methods as for the proof of Propositions 1, 2 and 3.

First, the steady-state conditions are q=Ψ(R, q) and R=0 or q=Φ(R, q), and a steady state is an equilibrium if R*P(R*, q*)+μ>0. A steady state exists and is an equilibrium if there is a q*>0 such that q*=Ψ(0, q*) and –P(0, q*)>–μ. Using the Taylor rule (21), the equilibrium condition is equivalent to (qq+)(qq)=0, where


As q<0<q+, then


which holds for any P(0, 0). As


then the transversality condition holds without further conditions.

An interior steady state is determined from the non-negative values of (R, q) such that q=Ψ(R, q)=Φ(R, q)>0. If we define r(R, q)≡RP(R, q), this condition is equivalent to (rr+)(rr)=0. As a necessary condition for a positive q is r(R, q)>ρ, then r(R, q)=r+>–μ, which means that the transversality condition is automatically verified. This is equivalent to γRq=(1+γ)(P(0, 0)+r+). Substituting in q=Ψ(R, q), we get the equation


After some algebra, we can prove that this equation has a non-negative solution for R if and only if r++P(0, 0)≥BP(0, 0)>0.

The local dynamics are determined in the same way as in the proofs of Propositions 2 and 3. But, in this case, the eigenvalues for the steady state (R1,q1) are


for the values of the parameters such that there are two steady states.

Appendix G. Proof of Proposition 5

It is easy to see that the steady state conditions are exactly the same as in the case of the conventional Taylor rule. The only thing that may change is related to the local and global dynamics of the model.

Applying the same methods as for the proof of Proposition 2, we find the eigenvalues for the steady state (R1,q1):


where sign(λ2)=sign(1+γδ).


Ahrend, R., B. Cournède, and R. Price. 2008. “Monetary Policy, Market Excesses and Financial Turmoil.” OECD Economics Department Working Papers 597.10.2139/ssrn.1302789Search in Google Scholar

Barnett, W. A., and Y. He. 2004. “Bifurcations in Macroeconomic Models.”, In Economic Growth and Macroeconomic Dynamics: Recent Developments in Economic Theory, edited by S. Dowrick, O. Rohan and S. Turnovsky, 95–112. Cambridge, UK: Cambridge University Press.10.1017/CBO9780511606618.006Search in Google Scholar

Barnett, W. A., and Y. He. 2006. “Singularity Bifurcations.” Journal of Macroeconomics 28: 5–22.10.1016/j.jmacro.2005.10.001Search in Google Scholar

Barnett, W. A., and Y. He. 2010. “Existence of Singularity Bifurcation in an Euler-equations Model of the United States Economy: Grandmont Was Right.” Economic Modelling 27: 1345–1354.10.1016/j.econmod.2010.07.020Search in Google Scholar

Benhabib, J., S. Schmitt-Grohé, and M. Uribe. 2001. “The Perils of Taylor Rules.” Journal of Economic Theory 96: 40–69.10.1006/jeth.1999.2585Search in Google Scholar

Benhabib, J., S. Schmitt-Grohé, and M. Uribe. 2002. “Avoiding Liquidity Traps.”Journal of Political Economy 110: 535–563.10.1086/339713Search in Google Scholar

Blanchard, O. J. 1985. “Debt, Deficits, and Finite Horizons.” Journal of Political Economy 93: 223–247.10.3386/w1389Search in Google Scholar

Brito, P., and R. Dilão. 2010. “Equilibrium Price Dynamics in an Overlapping-Generations Exchange Economy.” Journal of Mathematical Economics 46: 343–355.10.1016/j.jmateco.2010.01.001Search in Google Scholar

Calvo, G. A., and M. Obstfeld. 1988. “Optimal Time-Consistent Fiscal Policy with Finite Lifetimes.” Econometrica 56: 411–432.10.2307/1911079Search in Google Scholar

Campbell, J. Y., and J. F. Cocco. 2007. “How do House Prices Affect Consumption? Evidence from Micro Data.”. Journal of Monetary Economics 54: 591–621.10.3386/w11534Search in Google Scholar

Carroll, C. D., M. Otsuka, and J. Slacalek. 2011. “How Large Are Housing and Financial Wealth Effects? A New Approach.” Journal of Money, Credit and Banking 43: 55–79.10.1111/j.1538-4616.2010.00365.xSearch in Google Scholar

Clarida, R., J. Galí, and M. Gertler. 2000. “Monetary Rules and Macroeconomic Stability: Evidence and Some Theory.” Quarterly Journal of Economics 115: 147–180.10.3386/w6442Search in Google Scholar

Cochrane, J. 2011. “Determinacy and Identification with Taylor Rules.” Journal of Political Economy 119: 565–615.10.1086/660817Search in Google Scholar

Cushing, M. J. 1999. “The Indeterminacy of Prices under Interest Rate Pegging: The Non-Ricardian Case.” Journal of Monetary Economics 44: 131148.10.1016/S0304-3932(99)00012-4Search in Google Scholar

Deaton, A., and J. Muellbauer. 1980. Economics and Consumer Behavior. Oxford: Oxford University Press.10.1017/CBO9780511805653Search in Google Scholar

Dvornak, N., and M. Kohler. 2007. “Housing Wealth, Stock Market Wealth and Consumption: A Panel Analysis for Australia.” Economic Record 83: 117–130.10.1111/j.1475-4932.2007.00388.xSearch in Google Scholar

Eschtruth, A., and L. Tran. 2001. “A Primer on Reverse Mortgages.” Center for Retirement Research, Boston: Boston College.Search in Google Scholar

Galí, J. 2008. Monetary Policy, Inflation and the Business Cycle, Princeton: Princeton University Press.Search in Google Scholar

Galí, J. 2014. “Monetary Policy and Rational Asset Price Bubbles.” American Economic Review 104: 721–752.10.3386/w18806Search in Google Scholar

He, C., R. Wright, and Y. Zhu. 2015. “Housing and Liquidity.” Review of Economic Dynamics 18: 435–455.10.1016/ in Google Scholar

Iacoviello, M. 2005. “House Prices, Borrowing Constraints, and Monetary Policy in the Business Cycle.” American Economic Review 95: 739–764.10.1257/0002828054201477Search in Google Scholar

Judd, L. P., and G. D. Rudebusch. 1998. “Taylor’s Rule and the Fed: 1970–1997.” Federal Reserve Bank of San Francisco Economic Review 3: 3–16.Search in Google Scholar

Lagos, R., and R. Wright. 2005. “A Unified Framework for Monetary Theory and Policy Analysis.” Journal of Political Economy 113: 463–484.10.26509/frbc-wp-200211Search in Google Scholar

Lambertini, L., C. Mendicino, and M. T. Punzi. 2013. “Leaning Against Boom-Bust Cycles in Credit and Housing Prices.” Journal of Economic Dynamics and Control 37: 1500–1522.10.1016/j.jedc.2013.03.008Search in Google Scholar

Leamer, E. E. 2007. “Housing is the Business Cycle.” Proceedings, Federal Reserve Bank of Kansas City, 149–233.10.3386/w13428Search in Google Scholar

Leeper E., and C. Sims. 1994. “Toward a Modern Macro Model Usable for Policy Analysis.” NBER Macroeconomics Annual 1994, 81–117.10.1086/654239Search in Google Scholar

Marini, G., and F. Van der Ploeg. 1988. “Monetary and Fiscal Policy in an Optimizing Model with Capital Accumulation and Finite Lives”. Economic Journal 98: 772–786.10.2307/2233914Search in Google Scholar

Meltzer, A. H. 2011. “Federal Reserve Policy in the Great Recession.” Remarks, Cato Institute Annual Monetary Conference, November.Search in Google Scholar

Muellbauer, J. N. 2007. “Housing, Credit and Consumer Expenditure.” Proceedings, Federal Reserve Bank of Kansas City, 267–334.Search in Google Scholar

Nisticò, S. 2012. “Monetary Policy and Stock-Price Dynamics in a DSGE Framework.”Journal of Macroeconomics 34: 126–146.10.1016/j.jmacro.2011.09.008Search in Google Scholar

Poole, W. 2007. “Understanding the Fed.” Federal Reserve Bank of St. Louis Review 89: 3–13.10.20955/r.89.3-14Search in Google Scholar

Reis, R. 2007. “The Analytics of Monetary Non-Neutrality in the Sidrauski Model.” Economics Letters 94: 129–135.10.1016/j.econlet.2006.08.017Search in Google Scholar

Samuelson, P. A. 1958. “An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money.” Journal of Political Economy 66: 467–482.10.1086/258100Search in Google Scholar

Schmitt-Grohé, S., and M. Uribe. 2009. “Liquidity Traps with Global Taylor Rules.” International Journal of Economic Theory 5: 85–106.10.1111/j.1742-7363.2008.00095.xSearch in Google Scholar

Taylor, J. B. 1993. “Discretion Versus Policy Rules in Practice.” Carnegie-Rochester Conference Series on Public Policy 39: 195–214.10.1016/0167-2231(93)90009-LSearch in Google Scholar

Taylor, J. B. 1999a. Monetary Policy Rules. Chicago and London: University of Chicago Press.10.7208/chicago/9780226791265.001.0001Search in Google Scholar

Taylor, J. B. 1999b. “A Historical Analysis of Monetary Policy Rules.” In Monetary Policy Rules, edited by J. B. Taylor, 319–347. Chicago and London: University of Chicago Press.10.7208/chicago/9780226791265.001.0001Search in Google Scholar

Taylor, J. B. 2007. “Housing and Monetary Policy.” In Housing, Housing Finance, and Monetary Policy, Federal Reserve Bank of Kansas City.10.3386/w13682Search in Google Scholar

Taylor, J. B. 2010. “Does the Crisis Experience Call for a New Paradigm in Monetary Policy?” Warsaw School of Economics, (June 23), CASE Network Studies and Analyses No. 402.Search in Google Scholar

Taylor, J. B. 2011. “Macroeconomic Lessons from the Great Deviation.” In NBER Macroeconomics Annual 2010, edited by D. Acemoglu and M. Woodford, 25, Chicago: University of Chicago Press.10.1086/657553Search in Google Scholar

Taylor, J. B. 2012. “Monetary Policy Rules Work and Discretion Doesn’t: A Tale of Two Eras.” Journal of Money Credit and Banking 44: 1017–1032.10.1111/j.1538-4616.2012.00521.xSearch in Google Scholar

Weil, P. 1989. “Overlapping Families of Infinitely-Lived Agents.” Journal of Public Economics 38: 183–198.10.1016/0047-2727(89)90024-8Search in Google Scholar

Woodford, M. 2003. Interest and Prices. Princeton and Oxford: Princeton University Press.Search in Google Scholar

Yaari, M. E. 1965. “Uncertain Lifetime, Life Insurance, and the Theory of the Consumer.” The Review of Economic Studies 32: 137–150.10.2307/2296058Search in Google Scholar

Published Online: 2016-3-1
Published in Print: 2016-6-1

©2016 by De Gruyter

Scroll Up Arrow