Hi, thanks for the presentation! In the OG-USA simulations, you assume that in 20 years, a limit on deficits will be imposed to reduce debt, which is highly likely to be implemented as fiscal policy adjustments. On the other hand however, you seem not incorporate the changes in monetary policies in response to the effects brought by TCJA and assumes that the Fed will not take actions to offset the interest rate changes. I am wondering why you choose to rule out the potential policies to offset interest rate changes and if they are considered, how you predict the results from the models will change. Thank you!
Hi, thanks for the presentation! In the OG-USA simulations, you assume that in 20 years, a limit on deficits will be imposed to reduce debt, which is highly likely to be implemented as fiscal policy adjustments. On the other hand however, you seem not incorporate the changes in monetary policies in response to the effects brought by TCJA and assumes that the Fed will not take actions to offset the interest rate changes. I am wondering why you choose to rule out the potential policies to offset interest rate changes and if they are considered, how you predict the results from the models will change. Thank you!