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This paper develops a general perturbation methodology for constructing high-order approximations to the solutions of Markov-switching DSGE models. We introduce an important and practical idea of partitioning the Markov-switching parameter space so that a steady state is well defined. With this...
Persistent link: https://www.econbiz.de/10011083963
Fiscal uncertainty arises in many forms. Expiring temporary stimulus measures, projections of rapid debt growth, and oscillating political concerns over general levels of taxation are examples that all contribute to fiscal uncertainty. Motivated by anecdotal evidence associated with the US...
Persistent link: https://www.econbiz.de/10011122452
This paper investigates how different monetary policy regime switching types impact macroeconomic dynamics. Policy switches that either affect the inflation target or the response to deviations of inflation from target leads to different determinacy regions and different output, interest rates,...
Persistent link: https://www.econbiz.de/10010737641
Markov-switching DSGE (MSDSGE) modeling has become a growing body of literature on economic and policy issues related to structural shifts. This paper develops a general perturbation methodology for constructing high-order approximations to the solutions of MSDSGE models. Our new method, called...
Persistent link: https://www.econbiz.de/10010969361
This paper develops a general perturbation methodology for constructing high-order approximations to the solutions of Markov-switching DSGE models. We introduce an important and practical idea of partitioning the Markov-switching parameter space so that a steady state is well de?ned. With this...
Persistent link: https://www.econbiz.de/10011026560
During and after the recent financial crisis, the Federal Reserve turned to a number of unconventional tools to bolster the economy. The effectiveness of one such tool, large-scale asset purchases (LSAPs)—often referred to as quantitative easing—has been hard to measure. ; Efforts to...
Persistent link: https://www.econbiz.de/10011027249
Industrial production is both highly variable and correlated across sectors. This correlation arises in part from common or aggregate shocks and from sector-specific shocks that propagate across sectors via input-output linkages or other complementarities in production. Using factor analytic...
Persistent link: https://www.econbiz.de/10010554494
The macroeconomic environment often changes repeatedly over time, and often in a recurring manner. For example, the economy may switch between periods of high and low growth, or monetary policy may switch between periods of strong versus weak responses to inflation. An important question for...
Persistent link: https://www.econbiz.de/10010633054