Optimal interest rate rule in a DSGE model with housing market spillovers
Department of Economics, Virginia Tech, Blacksburg, VA 24061, United States
DSGE model with housing market spillovers featuring patient and impatient households, collateral constraints tied to housing wealth, sticky prices in consumption sector, sticky wages in both consumption and housing sectors, and two production s
retailers: monopolistic competition with Calvo pricing; consumption sector: combines capital and labor; housing sector: combines capital, labor, and land
Table 2
Optimal forward-looking interest rate rule (III) minimizing loss function