ZLB with extended path methods

Dear Dynare Users,

does anybody know how to model the ZLB with extended path methods? Does anybody have a sample code? Many thanks.



Basically the idea is to have your Taylor rule look something like: i = max(0, …), where the triple dots are the non-constrained rule.

Then you use the extended_path command of Dynare.

Thanks Sebastien, I have a further question. In some papers, I found that ZLB simulations are implemented by applying a sequence of anticipated monetary policy shocks, as in Bodenstein et al. (2009). How can this be implemented in Dynare? Thanks again


Nobody knows? Thanks.