A Graphical Representation of an Estimated DSGE Model
AbstractWe write a New Keynesian model as an aggregate demand curve and an aggregate supply curve, relating inflation to output growth. The graphical representation shows how structural shocks move aggregate demand and supply simultaneously. We estimate the curves on US data from 1948 to 2010. The Great Recession in 2008-09 is explained by a collapse of aggregate demand driven by adverse preference and permanent technology shocks, and expectations of low inflation.
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Bibliographic InfoPaper provided by CEPREMAP in its series Dynare Working Papers with number 3.
Length: 12 pages
Date of creation: May 2011
Date of revision:
Find related papers by JEL classification:
- E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
- E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-24 (All new papers)
- NEP-CBA-2011-05-24 (Central Banking)
- NEP-DGE-2011-05-24 (Dynamic General Equilibrium)
- NEP-MAC-2011-05-24 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alvarez-Lois, Pedro & Harrison, Richard & Piscitelli, Laura & Scott, Alasdair, 2008. "On the application and use of DSGE models," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 32(8), pages 2428-2452, August.
- Pierpaolo Benigno, 2009. "New-Keynesian Economics: An AS-AD View," NBER Working Papers 14824, National Bureau of Economic Research, Inc.
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