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econ.GN2025
A Step Towards a Solution to the Confidence-Driven Liquidity Trap Morass
Haochun Ma, Jordan Roulleau-Pasdeloup
Depending on the persistence of a one-off shock bringing the economy to the Effective Lower Bound (ELB), the standard New Keynesian model predicts starkly different conclusions. We…
econ.GN2025
Endogenous Persistence at the Effective Lower Bound
Chunbing Cai, Jordan Roulleau-Pasdeloup, Zhongxi Zheng
We develop a perfect foresight method to solve models with an interest rate lower bound constraint that nests OccBin/DynareOBC and \cite{Eggertsson2010}'s as well as \cite{Mertens2…