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• W2128659533 abstract "Countries rarely hit the zero lower bound (ZLB) on interest rates, but when they do, these episodes tend to be very long-lived. These two features are difficult to incorporate jointly into macroeconomic models using typical representations of shock processes. We introduce a regime-switching representation of risk premium shocks into an otherwise standard New Keynesian model to generate a realistic distribution of ZLB durations. We discuss what different calibrations of this model imply for optimal inflation rates." @default.
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• W2128659533 date "2016-10-31" @default.
• W2128659533 modified "2023-10-02" @default.
• W2128659533 title "Infrequent but Long-Lived Zero Lower Bound Episodes and the Optimal Rate of Inflation" @default.
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• W2128659533 doi "https://doi.org/10.1146/annurev-economics-080315-015306" @default.
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