… is that regardless of how stationarity is induced in the small open economy real business
cycle model, the model’s … of this paper is the fact that, as in the case in which labor supply is …

… strategy are contained in the expanded version of this paper (Schmitt-Grohé and Uribe,
2006b). … For details see the expanded version of this paper (Schmitt-Grohé and Uribe, 2006b). …

This paper derives a second-order approximation to the solution of a general class of discrete-time
rational expectations models. The main theoretical contribution is to show that for any …

… bound on nominal interest rates is taken into account, active … at which monetary policy is
active is locally the unique equilibrium… , that is, a steady state in which the nominal interest rate is …

… broken by assuming that the technology for transforming consumption goods into investment
goods is nonlinear. In Schmitt-Grohé and Uribe (2011), we estimated the curvature of the …

This paper studies optimal fiscal and monetary policy under sticky product prices. The
theoretical framework is a stochastic production economy. The government finances an …

… Perhaps the best-known result in this literature is that if fiscal solvency is preserved under
all circumstances, then an active monetary policy, that is, a policy that aggressively fights …

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… The transition probability matrix of the exogenous driving process is therefore of size 231
× 231. To compute this matrix, we follow the algorithm described in Schmitt-Grohé and Uribe (…

… What is the shape of the optimal policy regime in the context of economies with multiple
frictions and disturbances? Our hope is that this book will impart to careful readers the theories …