autoregressive model. In a high inflation regime the standard results from the literature obtain. In a low inflation regime output … shows no significant response to monetary policy while the inflation response is negative. The paper endogenously determines …

; inflation forecasts …

fell to unprecedented low levels in the 1980s and remained low while uncertainty about future output and inflation declined …

model in which endogenous regime switches are triggered by the inflation rate. The model separates a high from a low … inflation regime with both regimes being strongly persistent. Generalized impulse response functions highlight important across …-regime differences in the responses of the economy to monetary policy and inflation shocks. Simulating both regimes with individual …