Adam, Klaus (contributor); Billi, Roberto M. (contributor) - 2004
to set nominal rates below
zero. This feature aggravates the solution of the policy problem but allows
us to calibrate … equivalent to linearizing the first order conditions of the
nonlinear Ramsey problem around the first best steady state except ….
Instead of deriving the first order conditions of problem (9) and trying
to solve the resulting system of equations, which is …