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Methods versus substance: Measuring the effects of technology shocks

Listed author(s):
  • Ríos-Rull, José-Víctor
  • Schorfheide, Frank
  • Fuentes-Albero, Cristina
  • Kryshko, Maxym
  • Santaeulàlia-Llopis, Raül

Calibration and modern (Bayesian) estimation methods for a neoclassical stochastic growth model are applied to make the case that the identification of key parameters, rather than quantitative methodologies per se, is responsible for empirical findings. For concreteness, the model is used to measure the contributions of technology shocks to the business cycle fluctuations of hours worked and output. Along the way, new insights are provided in the parameter identification associated with likelihood-based estimation, the sensitivity of likelihood-based estimation to the choice of structural shocks is assessed, and Bayesian model averaging is used to aggregate findings obtained from different DSGE model specifications.

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Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 59 (2012)
Issue (Month): 8 ()
Pages: 826-846

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Handle: RePEc:eee:moneco:v:59:y:2012:i:8:p:826-846
DOI: 10.1016/j.jmoneco.2012.10.008
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505566

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