Some Related Researches Benhabib, Schmitt-Grohe and Uribe(2001, AER 02002 JET)find that Taylor Rules are possible to generate multiple equilibria(indeterminacy and bifurcation)and hence lead to high inflation. The mechanism lies in the active response of interest rate to inflation, i. e. p>l in (9) SU(2003, JET)assume distortion from monopolistic competition cant be removed by subsidy(with sticky price we have inflation incentive to increase employment) and government has no access to lump-sum tax (hence inflation plays as a non-distortionary tax to finance government spending). They also assume sticky price and Cia (welfare loss of inflation to firms and agents ). Then the optimal (with commitment) volatility of inflation is close to zero(compared with Gali, 2003) ACC(2002, pp.30)find that lack of commitment together with CIa and sticky price can generate multiple equilibria(non-monotone cost function of inflation- first decrease and then increase 复9大学经学院 compared with ACC, 2003. which assumes different money demand and technologySome Related Researches • Benhabib, Schmitt-Grohe and Uribe (2001, AER, 2002, JET) find that Taylor Rules are possible to generate multiple equilibria (indeterminacy and bifurcation) and hence lead to high inflation. The mechanism lies in the active response of interest rate to inflation, i.e. фπ > 1 in (9). • SU (2003, JET) assume distortion from monopolistic competition can’t be removed by subsidy (with sticky price we have inflation incentive to increase employment) and government has no access to lump-sum tax (hence inflation plays as a non-distortionary tax to finance government spending). They also assume sticky price and CIA (welfare loss of inflation to firms and agents). Then the optimal (with commitment) volatility of inflation is close to zero (compared with Gali, 2003). • ACC (2002, pp.30) find that lack of commitment, together with CIA and sticky price, can generate multiple equilibria (non-monotone cost function of inflation – first decrease and then increase – compared with ACC, 2003, which assumes different money demand and technology)