Before revision:  We formalize this `irrelevance hypothesis ' using a dynamic stochastic general equilibrium model with UMP and test it empirically for  the United States and Japan using a structural vector autoregressive model that includes variables subject to occasionally binding constraints.
After revision:  We formalize this `irrelevance hypothesis ' using a dynamic stochastic general equilibrium model with UMP and test it empirically for Japan and the United States and Japan using a structural vector autoregressive model that includes variables subject to occasionally binding constraints.