scholarly journals Estimation of Dynamic Models with Occasionally Binding Constraints.

2016 ◽  
Author(s):  
Tom Holden
Keyword(s):  
Dynamic Models ◽  
Binding Constraints ◽  
Occasionally Binding Constraints

scholarly journals Existence and Uniqueness of Solutions to Dynamic Models with Occasionally Binding Constraints

2021 ◽  
pp. 1-45
Author(s):  
Tom D. Holden
Keyword(s):  
Existence And Uniqueness ◽  
Multiple Equilibria ◽  
Dynamic Models ◽  
Linear Models ◽  
Sufficient Conditions ◽  
Equilibrium Existence ◽  
Perfect Foresight ◽  
New Keynesian Models ◽  
Binding Constraints ◽  
Occasionally Binding Constraints

Abstract Occasionally binding constraints (OBCs) like the zero lower bound (ZLB) can lead to multiple equilibria, and so to belief-driven recessions. To aid in finding policies that avoid this, we derive existence and uniqueness conditions for otherwise linear models with OBCs. Our main result gives necessary and sufficient conditions for such models to have a unique (“determinate”) perfect foresight solution returning to a given steady state, for any initial condition. While standard New Keynesian models have multiple perfect-foresight paths eventually escaping the ZLB, price level targeting restores uniqueness. We also derive equilibrium existence conditions under rational expectations for arbitrary non-linear models.

scholarly journals Likelihood evaluation of models with occasionally binding constraints

2019 ◽  
Vol 34 (7) ◽  
pp. 1073-1085 ◽  
Author(s):  
Pablo Cuba‐Borda ◽  
Luca Guerrieri ◽  
Matteo Iacoviello ◽  
Molin Zhong
Keyword(s):  
Binding Constraints ◽  
Occasionally Binding Constraints
Sign in / Sign up

Export Citation Format

Share Document