Occasionally binding constraints

What you will learn

In these tutorials and videos I will cover simulation and estimation in Dynare of models with occasionally binding constraints such as the zero-lower-bound (ZLB) on nominal interest rates or irreversible investment.

Occasionally binding constraints

• Zero-Lower-Bound (ZLB) in the New Keynesian baseline model with Dynare

  In this video I will show you how to incorporate the Zero Lower Bound on nominal interest rates in the canonical New Keynesian model with Dynare. We’ll discuss why and how this has an adverse effect on welfare, and how optimal policy under discretion and commitment looks like. We’ll compare both cases in Dynare.