Similar Search Results

Heterogeneous expectations, indeterminacy, and postwar US business cycles

Ilabaca, Francisco; Milani, Fabio - 2020

postwar US macroeconomic data can be explained as the outcome of passive monetary policy, indeterminacy, and sunspot … windows and allowing the parameters to fall both in the determinacy and indeterminacy regions. The estimates reveal large … the sample. The results confirm that macroeconomic data in the early windows are better explained by indeterminacy, while …

Persistent link: https://www.econbiz.de/10012200338

Bounded rationality, monetary policy, and macroeconomic stability

Ilabaca, Francisco; Meggiorini, Greta; Milani, Fabio - 2019

both determinacy and indeterminacy. The empirical results show that determinacy is preferred both before and after 1979 … rationality that we estimate prevent the economy from falling into indeterminacy. …

Persistent link: https://www.econbiz.de/10012029136

Behavioral New Keynesian models : learning vs. cognitive discounting

Meggiorini, Greta; Milani, Fabio - 2021

This paper estimates a New Keynesian model with new and old behavioral elements. Agents in the model exhibit cognitive discounting, or myopia: they discount variables far into the future at higher rates than typically implied in the benchmark model. We investigate the model under different...

Persistent link: https://www.econbiz.de/10012509319

Business cycles when consumers learn by shopping

Gutiérrez-Daza, Ángelo - 2024

Empirical evidence suggests consumers rely on their shopping experiences to form beliefs about inflation. In other words, they "learn by shopping". I introduce this empirical observation as an informational friction in the New Keynesian model and use it to study its consequences for the...

Persistent link: https://www.econbiz.de/10015069687

Inflation tolerance bands and private sector beliefs

Milani, Fabio - 2025

This paper estimates a New Keynesian model with a nonlinearity in the monetary policy rule to capture the practice of inflation targeting with target zones or tolerance bands. Private-sector agents form subjective expectations, update their beliefs over time using a perceived model of the...

Persistent link: https://www.econbiz.de/10015407758

How to escape a liquidity trap with interest rate rules

Duarte, Fernando - 2016

I give necessary and sufficient conditions under which interest-rate feedback rules eliminate aggregate instability by inducing a globally unique optimal equilibrium in a canonical New Keynesian economy with a binding zero lower bound. I consider a central bank that initially keeps interest...

Persistent link: https://www.econbiz.de/10011477354

An interest rate rule to uniquely implement the optimal equilibrium in a liquidity trap

Duarte, Fernando; Zabai, Anna - 2015

We propose a new interest rate rule that implements the optimal equilibrium and eliminates all indeterminacy in a …

Persistent link: https://www.econbiz.de/10011346620

Interest rate rules under financial dominance

Lewis, Vivien; Roth, Markus - 2018

We study the equilibrium properties of a business cycle model with financial frictions and price adjustment costs. Capital-constrained entrepreneurs finance risky projects by borrowing from banks. Banks, in turn, make loans using equity and deposits. Because financial contracts are not...

Persistent link: https://www.econbiz.de/10011897971

Household heterogeneity, nonseparable preferences, and the Taylor principle

Jansen, Babette; Winkler, Roland - 2024

We consider a two-agent New Keynesian model with savers and hand-to-mouth households with quasi-separable utility functions as introduced by Bilbiie (2020a). This framework allows for separate parameterization of consumption-hours complementarity and income effects on labor supply. We examine...

Persistent link: https://www.econbiz.de/10015064065

Time-varying dynamics of the German business cycle : a comprehensive investigation

Reif, Magnus - 2021

This paper provides insights into the time-varying dynamics of the German business cycle over the last five decades. To do so, I employ an open-economy time-varying parameter VAR with stochastic volatility, which I estimate by quasi-Bayesian techniques. The reduced-form analysis reveals...

Persistent link: https://www.econbiz.de/10012607593