Epstein-Zin preferences and their use in macro-finance models: Implications for optimal monetary policy
European Central Bank; Polytechnique
New Keynesian DSGE model with Epstein-Zin recursive preferences, capital accumulation, Calvo price and wage stickiness, habit formation, and investment adjustment costs
intermediate firms: monopolistic competition with Calvo pricing; final firms: perfect competition; capital producers: investment adjustment costs
Table 3 p.24
Optimal Ramsey policy with Epstein-Zin preferences (sigma=10)