@misc{11297,
title = {Rule-of-Thumb Consumers, Nominal Rigidities and the Design of Interest Rate Rules},
author = {Ocampo Díaz, Sergio},
year = {2013},
doi = {10.18235/0011500},
abstract = {This paper argues that, in the presence of nominal wage rigidities, the existence of Rule-of-Thumb agents and price rigidities does not cause a change in the Taylor Principle as suggested by Galí et al. (2004), and that the only rigidity relevant for this result is that faced by Rule-of-Thumb consumers. For doing so, a New-Keynesian model with Rule-of-Thumb agents is proposed. The model discriminates between both type of agents when defining wage rigidities, thus al- lowing to identify and measure the factors that affect the Taylor Principle, this also allows to drop complete markets for Rule-of-Thumb agents, and the simple use of non-separable utility functions in order to determine the incidence of the wealth effect when facing staggered wages.},
url = {https://doi.org/10.18235/0011500}
}