Help！BK condition is not satisfied bcz of interest rate rule
Posted: Wed Dec 04, 2013 11:56 amHi all,
My problem is that BK condition is not satisfied when interest rate is i in taylor rule, but when that is i(+1), it is OK. That is:
When i=eta+a(+1)-a+1.5*pi , eta+a(+1)-a is the nature rate of i, BK is not satisfied
when i(+1)=eta+a(+1)-a+1.5*pi , BK is satisfied.
See the attachment.
Thanks a loooooooot!
S.Xing
My problem is that BK condition is not satisfied when interest rate is i in taylor rule, but when that is i(+1), it is OK. That is:
When i=eta+a(+1)-a+1.5*pi , eta+a(+1)-a is the nature rate of i, BK is not satisfied
when i(+1)=eta+a(+1)-a+1.5*pi , BK is satisfied.
See the attachment.
Thanks a loooooooot!
S.Xing