  This paper investigates the identification, the determinacy and the stability
of ad hoc, "quasi-optimal" and optimal policy rules augmented with financial
stability indicators (such as asset prices deviations from their fundamental
values) and minimizing the volatility of the policy interest rates, when the
central bank precommits to financial stability. Firstly, ad hoc and
quasi-optimal rules parameters of financial stability indicators cannot be
identified. For those rules, non zero policy rule parameters of financial
stability indicators are observationally equivalent to rule parameters set to
zero in another rule, so that they are unable to inform monetary policy.
Secondly, under controllability conditions, optimal policy rules parameters of
financial stability indicators can all be identified, along with a bounded
solution stabilizing an unstable economy as in Woodford (2003), with
determinacy of the initial conditions of non- predetermined variables.
