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be explained by macro shocks. In particular, the monetary policy shock is the most important determinant of the level …. The effect of the premium and monetary policy shocks is strongest in the period when the shock occurs, while for the …
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The purpose of this paper is to show how to solve linear dynamic rational expectations models with anticipated shocks by using the generalized Schur decomposition method. Furthermore, we determine the optimal unrestricted and restricted policy responses to anticipated shocks. We demonstrate our...
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