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Moment estimation in Auerbach-Kotlikoff models: How well do they match the data?

Listed author(s):
  • Alexander Ludwig

    ()

    (Munich Center for the Economics of Aging (MEA))

Despite their widespread use for the analysis of economic questions, a formal and systematic calibration methodology has not yet been developed for Auerbach-Kotlikoff (Auerbach and Kotlikoff 1987) overlapping generations (AK-OLG) models. Calibration as estimation in macroeconomics involves choosing free parameters by matching moments of simulated models with those of the data. This paper maps this approach into the framework of AK-OLG models. The paper further evaluates the back-fitting properties of three different versions of a prototype AK-OLG model along a number of dimensions of mostly US data for the time period 1960-2003.

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Paper provided by Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy in its series MEA discussion paper series with number 05093.

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Date of creation: 30 Aug 2005
Handle: RePEc:mea:meawpa:05093
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