We estimate a workhorse DSGE model with an occasionally binding borrowing constraint. First, we propose a new specification of the occasionally binding constraint, where the transition between the unconstrained and constrained states is a stochastic function of the leverage level and the constraint ...
Keywords:
financial crises, Business Cycles, Endogenous Regime-Switching, Bayesian Estima- tion, Occasionally Binding Constraints, Mexico.
