The Zero Lower Bound Constraint on Nominal Int. Rate

[xuz]

@SébastienVillemot

As stated above, Dynare can perform analyses of ZLB in a deterministic setup (using the “simul” command, where nonlinearities are fully handled), but not in a stochastic setup (using “stoch_simul”).

If you want to analyze ZLB in a stochastic setup, then use a global method or the extended path methods. These methods will be incorporated in Dynare at some point in the future, but are not yet there.

I wonder anyone has a sample code for the global method with the ZLB? How should we interpret “max{0, i*}” as a spline or Chebyshev?

Thanks in advance!