Labor-Market Heterogeneity, Aggregation, and the Policy-(In)variance of DSGE Model Parameters
Data from a heterogeneous-agents economy with incomplete asset markets and indivisible labor supply are simulated under various scal policy regimes and an approximating representative-agent model is estimated. Preference and technology parameter estimates of the representative-agent model are not invariant to policy changes and the bias in the representative-agent model's policy predictions is large compared to predictive intervals that re ect parameter uncertainty. Since it is not always feasible to account for heterogeneity explicitly, it is important to recognize the possibility that the parameters of a highly aggregated model may not be invariant with respect to policy changes.
|Date of creation:||05 Oct 2012|
|Date of revision:|
|Contact details of provider:|| Postal: 50 Yonsei-ro, Seodaemun-gu, Seoul|
Web page: http://yeri.yonsei.ac.kr/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:yon:wpaper:2012rwp-51. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (YERI)
If references are entirely missing, you can add them using this form.