Research areas
- Markov-switching DSGE models
- monetary-policy-regime-switching
- Bayesian macroeconometrics
- Fiscal-monetary policy interactions
Key papers
- regime-switches-agents-beliefs-post-world — MS-DSGE with agents’ beliefs, beliefs counterfactuals (Review of Economic Studies, 2013)
Recent work
Known for developing the theoretical and computational tools for estimating medium-scale DSGE models with regime switches in structural parameters. The beliefs counterfactual methodology introduced in the 2013 paper has become an important tool for policy analysis in models with regime changes.
Collaborators
- Leonardo Melosi (Federal Reserve Bank of Chicago)
- Cosmin Ilut (Duke University)
My notes
Bianchi’s work on MS-DSGE models is directly relevant to the Leather-Sagi CRE project. His Farmer-Waggoner-Zha-based solution method and the beliefs counterfactual approach provide the methodological foundation for understanding how agents’ expectations about monetary policy regimes affect asset prices. The finding that U.S. monetary policy features recurrent Hawk/Dove switches (not a one-time break) supports the CRE model’s use of ergodic Markov chains.