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An Interpretation of Fluctuating Macro Policies

Author

Listed:
  • Eric Leeper
  • Troy Davig

    (Department of Economics College of William and Mary)

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

Suggested Citation

  • Eric Leeper & Troy Davig, 2005. "An Interpretation of Fluctuating Macro Policies," Computing in Economics and Finance 2005 249, Society for Computational Economics.
    • Handle: RePEc:sce:scecf5:249
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    File URL: http://repec.org/sce2005/up.21329.1107136406.pdf
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    References listed on IDEAS

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    1. Guillermo Calvo & Mervyn King (ed.), 1998. "The Debt Burden and its Consequences for Monetary Policy," International Economic Association Series, Palgrave Macmillan, number 978-1-349-26077-5, December.
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    More about this item

    Keywords

    Policy rules; Markov-switching; DSGE models;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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