Ricerc@Sapienza

This project aims to reconsider the evolution of the business cycles by relying on the study of the nonlinear dynamics from both theoretical and empirical point of view. The project novelty consists in considering from an empirical and theoretical perspective the endogenous regime switches in both the firms and households behavioural equations which are modelled as changes in expectations and hazard functions determining the shapes of the price-setting curves. Therefore, our aim consists in building and estimating a monetary macro-model accommodating for regime-switching behaviour in monetary policy, price and wage settings, and macroeconomic volatilities.