Davig, Troy; Leeper, Eric M. - 2009
and fiscal policy behavior. Studies
that impose active monetary policy and passive fiscal policy typically find that … also assume active monetary policy [see, for example,
Gali, Lopez-Salido, and Valles (2007), Ravn, Schmitt-Grohe, and Uribe … preference specifications due to King, Plosser, and Rebelo
(1988) and Greenwood, Hercowitz, and Huffman (1988).
5Monetary policy …