Cel "This project will estimate a DSGE model with rare disasters using data from the Great Recession. Previous studies on rare disasters have been confined mainly to endowment economies. Extensions to production economies (business cycle models) have been limited. In particular, DSGE models with rare disasters have not been estimated before. The main obstacle is computational, as these models are very difficult to solve. In a recent paper with Jesus Fernandez-Villaverde we have shown that the computational problem can be resolved by a new solution method called ""Taylor Projection"", which is derived in my paper Levintal (2016). This method is able to solve large DSGE models with rare disasters in a few seconds only. This opens up the possibility of estimating rich DSGE models with rare disasters and conducting policy analysis.The project will implement the new ""Taylor Projection"" method to solve and estimate a DSGE model with rare disasters for the period of the Great Recession. This will require to extend the current solution method to allow for a ZLB constraint on the interest rate and for Markov-switching parameters, as described in the proposal. An estimated model with rare disasters may help to explain the extraordinary dynamics of the Great Recession. We conjecture that the interaction of a big macroeconomic shock (disaster shock) with the ZLB constraint played a significant role in the recession. The question is what kind of a shock generated the recession. Was it a permanent drop in long term growth, as suggested by the ""Secular Stagnation"" hypothesis of Summers (2014)? or an uncertainty shock that increased the demand for safe assets, in line with the ""Safe Assets"" view of Caballero and Farhi (2014)? or a combination of both? The proposed project will shed light on these questions by studying the Great Recession through an estimated DSGE model with rare disasters." Dziedzina nauki social sciencespolitical sciencespolitical policiessocial sciencessociologygovernancecrisis management Słowa kluczowe DSGE models computational macro nonlinear models Program(-y) H2020-EU.1.3. - EXCELLENT SCIENCE - Marie Skłodowska-Curie Actions Main Programme H2020-EU.1.3.2. - Nurturing excellence by means of cross-border and cross-sector mobility Temat(-y) MSCA-IF-2016 - Individual Fellowships Zaproszenie do składania wniosków H2020-MSCA-IF-2016 Zobacz inne projekty w ramach tego zaproszenia System finansowania MSCA-IF - Marie Skłodowska-Curie Individual Fellowships (IF) Koordynator REICHMAN UNIVERSITY Wkład UE netto € 263 385,00 Adres 8 HAUNIVERSITA ST 4610101 Herzliya Izrael Zobacz na mapie Rodzaj działalności Higher or Secondary Education Establishments Linki Kontakt z organizacją Opens in new window Strona internetowa Opens in new window Uczestnictwo w unijnych programach w zakresie badań i innowacji Opens in new window sieć współpracy HORIZON Opens in new window Koszt całkowity € 263 385,00 Partnerzy (1) Sortuj alfabetycznie Sortuj według wkładu UE netto Rozwiń wszystko Zwiń wszystko Partner Organizacje partnerskie biorą udział w realizacji działania, jednak nie podpisują umowy o grant. THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA CORP Stany Zjednoczone Wkład UE netto € 0,00 Adres 3451 WALNUT STREET ROOM P 221 19104 Philadelphia Zobacz na mapie Rodzaj działalności Higher or Secondary Education Establishments Linki Kontakt z organizacją Opens in new window Strona internetowa Opens in new window Uczestnictwo w unijnych programach w zakresie badań i innowacji Opens in new window sieć współpracy HORIZON Opens in new window Koszt całkowity € 172 130,40