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Dynamic specifications in optimizing trend-deviation macro models

Listed author(s):
  • Kozicki, Sharon
  • Tinsley, P. A.

As noted in surveys by Goodfriend and King (1997) and Walsh (1998) and exemplified by models analyzed in Taylor (1999), there is encouraging progress in developing optimizing trend-deviation macro models that provide useful insights into the transmission and design of monetary policy. Several controversial features of a minimalist trend-deviation model, with optimizing households, firms, and bond traders, are examined. Dynamic specifications are suggested to improve the data-based realism, while preserving the simplicity, of the minimalist model.

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Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 26 (2002)
Issue (Month): 9-10 (August)
Pages: 1585-1611

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Handle: RePEc:eee:dyncon:v:26:y:2002:i:9-10:p:1585-1611
Contact details of provider: Web page: http://www.elsevier.com/locate/jedc

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