Endogenous Monetary Policy Regime Change

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Troy Davig; Eric M. Leeper;
  • Subject: Markov switching, Taylor rule, expectations formation | Monetary policy ; Taylor's rule
    • jel: jel:E32 | jel:E31 | jel:E52 | jel:E58

This paper makes changes in monetary policy rules (or regimes) endogenous. Changes are triggered when certain endogenous variables cross specified thresholds. Rational expectations equilibria are examined in three models of threshold switching to illustrate that (i) exp... View more
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