(Gali 2015, Chapter 4) Consider the following version of the three-equation New-Keynesian model with a classical Taylor rule. yt = Etyt+1 1 (rt rt n ) t = Ett+1 + yt it = rt n + t t and yt represent respectively inflation and the output gap, and both values are zero in steady state. rt is the real interest and rt n is the natural interest rate., which is exogenous and time-varying. All the parameters are positive