An Interpretation of Fluctuating Macro Policies

Eric Leeper and Troy Davig

No 249, Computing in Economics and Finance 2005 from Society for Computational Economics

Abstract: This paper estimates simple regime-switching rules for monetary policy and tax policy over the post-war period in the United States and imposes the estimated policy process on a standard dynamic stochastic general equilibrium model with nominal rigidities. The estimated joint policy process produces a unique stationary rational expectations equilibrium in a simple New Keynesian model. We characterize policy impacts across regimes

Keywords: Policy rules; Markov-switching; DSGE models (search for similar items in EconPapers)
JEL-codes: E42 E51 E52 (search for similar items in EconPapers)
Date: 2005-11-11
New Economics Papers: this item is included in nep-dge and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:sce:scecf5:249

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