It is well recognized that projections of monetary policy objectives and policy actions are uncertain. Inflation-targeting banks, to preserve credibility, try to make clear that their projections are uncertain by providing interval forecasts or fan charts rather than simple point forecasts....

in both a simple analytic model, where news shocks overcome the ``dynamic inconsistencies" documented in Estrella and Fuhrer (2002), and in a model that incorporates many of the real rigidities common to DSGE models. The paper calls for more thoughtful modeling of how information about...

Fiscal foresight---the phenomenon that legislative and implementation lags ensure that private agents know the tax rates they face in the future---is intrinsic to the tax policy process. Although acknowledged in empirical work, theoretical analysis of its implications is scant. This paper...

A Bayesian prior predictive analysis is conducted on a suite of models to assess the probability that a model and corresponding prior distributions bias results toward a specific range of fiscal multipliers. We examine a wide range of DSGE models commonly used to estimate fiscal multipliers,...

The literature on the zero lower bound has grown rapidly since Eggertsson and Woodford (2003). But estimation of the effects of practical monetary policy at the zero lower bound (ZLB) remains a daunting task. In this paper, we propose a new approach to estimating a log-linearized DSGE model with...

This paper develops a methodology for approximating rational expectations models with Markov Switching. Specifically, we consider how to do both linear and higher-order approximations, including cases when each individual regime is associated with it's own steady state. We document the...

We argue that positive co-movements between land prices and business investment are a driving force behind the broad impact of land-price dynamics on the macroeconomy. We develop an economic mechanism that captures the co-movements by incorporating two key features into a DSGE model: We...

We develop a new method for solving forward-looking rational expectations models with regime change and we apply it to the case of switches in monetary regime in U.S. data. Existing solutions to this problem are nonlinear since the parameters of a Markov switching model are functions of the...

There prevails a view that the monetary policy in the Euro area has changed, especially after the European Monetary System (EMS) came into operation in 1979. The goal of this paper is to quantify (1) the extent to which policy regime has changed and (2) the counterfactual effects of such regimes...