We estimate a small-scale nonlinear DSGE model with the zero lower bound (ZLB) of the nominal interest rate for Japan, where the ZLB has constrained the country's monetary policy for a considerably long period. We employ the time iteration with linear interpolation method to solve equilibrium...

The search for new ideas by profit-seeking firms and knowledge spillovers are well-known and fundamental sources of modern economic growth. This paper examines the implications of idea production and knowledge capital for monetary business cycles. We construct a sticky-wage model where workers...

This paper estimates the effects of monetary policy on real economic activity and prices in Japan, during the last three decades when the effective lower bound (ELB) on interest rates was occasionally binding. To identify monetary policy shocks, we use the monetary policy surprises from the...