01744cas a2200253 a 4500 AALejournalIMF011853 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475503500 1018-5941 BD-DhAAL BD-DhAAL Zanna, Luis-Felipe. Interest Rate Rules, Endogenous Cycles, and Chaotic Dynamics in Open Economies / Luis-Felipe Zanna, Marco Airaudo. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (40 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We present an extensive analysis of the consequences for global equilibrium determinacy in flexible-price open economies of implementing active interest rate rules, id est, monetary rules where the nominal interest rate responds more than proportionally to inflation. We show that conditions under which these rules generate aggregate instability by inducing liquidity traps, endogenous cycles, and chaotic dynamics depend on specific characteristics of open economies. In particular, rules that respond to expected future inflation are more prone to induce endogenous cyclical and chaotic dynamics the more open the economy to trade. Mode of access: Internet Airaudo, Marco. IMF Working Papers; Working Paper ; No. 2012/121 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/121/001.2012.issue-121-en.xml IMF e-Library