monetary policy shocks. Endogeneity implies a correlation between regressors and the error term, and hence, an asymptotic bias … Keynesian model that the asymptotic OLS bias is proportional to the fraction of the variance of regressors accounted for by … in monetary policy rules, the endogeneity bias is small. Using simulations, we show that, for realistic sample sizes, the …

and implement suitable bias corrections. Extensive simulation experiments confirm the desirable statistical properties of … the bias-corrected estimators. Empirically, taking two sources of persistence - true state dependence and unobserved … heterogeneity - into account using a dynamic specification, along with appropriate fixed effects and bias corrections, changes the …