However, the steady states
have stability properties associated with them in a fully dynamic analysis, and the argument is that the targeted steady state
is the stable one, while the unintended, low nominal interest rate steady state
The model above taught us that the Fisher equation together with a Taylor rule that responds strongly to inflation can lead to multiple steady states
and other equilibria because of the lower bound on nominal interest rates.
Thus, when comparing the low real money balances' steady states
and dynamic equilibria converging to them, paying interest will be welfare improving.
In this paper we take advantage of the fact that experimental methods allow the underlying parameters of the economy to be observed and manipulated, and we construct and study the behavior of dynamic laboratory macroeconomies that are known to have multiple, locally stable, Pareto-rankable stationary steady states
To arrive at this estimate, the geometric mean of lead found along the eight streets included in the steady-state surveys was multiplied by the number of steady states
reached per year, and then multiplied by the number of kilometers of major streets.
Fitch receives historical performance data and monthly servicing reports from WFNNB and utilizes the information to derive steady states
for key performance metrics.
The OECD countries are likely at or near the steady state
, with small changes in steady states
due to small changes in savings or population growth rates.
OECD countries have never been too far from their steady states
, and the reduction of dispersion is mostly explained in terms of convergence in steady states
themselves, that is, in the long-run determinants of per capita income (savings rates, human capital accumulation, etc.
By contrast, the modified policy rule implies that there are two steady states
([pi] = [beta] and = [pi] = [beta] [R.
In addition, a fully integrated steady state
simulation model covering the entire EO/EG process was developed using the PRO/II simulation platform.
The multiplicity of steady states
turns out to be robust also with respect to the introduction of lump-sum monetary transfers.
The same externality also causes the possibility of multiple steady states
and hence coordination failure.