An Inventory of Simple Monetary Policy Rules in a New Keynesian Macroeconomic Model

We derive necessary and sufficient conditions for simple monetary policy rules that guarantee equilibrium determinacy in the New Keynesian Monetary Model. Our modeling framework is derived from a fully specified optimization model that is amendable to analytical characterization. The monetary policy rules analyzed are variants of teh basic Taylor rules ranging from simple inflation targeting (Current, forward, backward) to canonical Taylor rules with and without inertial nominal interest rates. We establish that determinacy obtains for a wide range of policy parameters, especially when the monetary authority targets output and smoothes interest rates. Contrary to other results in the literatura, we do not find a case for super-inertial interest rate policy.