Discussion Slides: K. J. Lansing - "Endogenous Regime Shifts in a New Keynesian Model with a Time"
Jul 3, 2017
1 min read
Updated: May 6, 2021
Discussion slides of the paper of Kevin J. Lansing (S. Francisco Fed), "Endogenous Regime Shifts in a New Keynesian Model with a Time-Varying Natural Rate of Interest", prepared for the Conference on the Applications of Behavioural Economics, and Multiple Equilibrium Models to Macroeconomic, at Bank of England, London 3-4 July 2017 [PDF]
With https://casinoappplay.com sitting in my tabs, the way Lansing’s model lets beliefs about the natural rate generate self-fulfilling regime shifts struck me as genuinely subtle. I often think of probability as fixed, but this shows how the same fundamentals can produce very different equilibria just because expectations move—something I notice even watching betting lines react to momentum.