Since the financial meltdown of 2007, advanced macroeconomic theory has delved more deeply into the question of the appropriate fiscal policy when the nominal interest rate is close to or at zero percent. Such analysis is typically conducted with the aid of New Keynesian Dynamic Stochastic...

This paper deals with Dynamic Stochastic General Equilibrium (DSGE) models under a multivariate student-<italic>t</italic> distribution for the structural shocks. Based on the solution algorithm of Klein (2000) and the gamma-normal representation of the <italic>t</italic>-distribution, the TaRB-MH algorithm of Chib and...

In this paper we develop new Markov chain Monte Carlo schemes for the estimation of Bayesian models. One key feature of our method, which we call the tailored randomized block Metropolis-Hastings (TaRB-MH) method, is the random clustering of the parameters at every iteration into an arbitrary...