TY  - JOUR
AU  - Benhabib,Jess
TI  - A Note on Regime Switching, Monetary Policy, and Multiple Equilibria
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14770
PY  - 2009
Y2  - March 2009
UR  - http://www.nber.org/papers/w14770
L1  - http://www.nber.org/papers/w14770.pdf
N1  - Author contact info:
Jess Benhabib
Department of Economics
New York University
19 West 4th Street, 6th Floor
New York, NY 10012
Tel: 212/998-8971
Fax: 212/995-4186
E-Mail: jess.benhabib@nyu.edu
AB  - When monetary policy is subject to regime switches conditions for determinacy become more complex. Davig and Leeper (2007) and Farmer, Waggoner and Zha (2009a) have studied such conditons. Using some new results from stochastic processes, we characterize the moments of the stationary distribution of inflation under regime switiching to obtain conditions for indeterminacy that can be easily checked and interpreted in terms of expected values of Taylor coefficients. In the last section, we outline methods to compute the moments of stationary distributions in regime switching models of higher dimensions.
ER  -