Alexandre, Fernando; Bação, Pedro; Gabriel, Vasco - Grupo de Estudos Monetários e Financeiros (GEMF), … - 2008
We analyse the effect of uncertainty concerning the state and the nature of asset price movements on the optimal monetary policy response. Uncertainty is modeled by adding Markov-switching shocks to a DSGE model with capital accumulation. In our analysis we consider both Taylor-type rules and...