A Graphical Representation of an Estimated DSGE Model

We 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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Year of publication:	2011-05
Authors:	Kulish, Mariano ; Jones, Callum
Institutions:	Centre pour la Recherche Économique et ses Applications (CEPREMAP)

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Extent:	application/pdf application/zip
Series:	Dynare Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 3 12 pages
Classification:	E27 - Forecasting and Simulation ; E37 - Forecasting and Simulation ; E58 - Central Banks and Their Policies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009019036