New Keynesian Models and the Kydland and Prescott Test

This paper evaluates New Keynesian models using RBC methods for a number of key macroeconomic variables. Its main findings are that the NK model provides a good description of the behaviour of real variables but performs very poorly when nominal variables are considered. The latter result is puzzling, given the success of NK models in replicating impulse response function and presents a challenge for current models.

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Year of publication:	2004-11-02
Authors:	Paez-Farrell, Juan
Institutions:	EconWPA
Subject:	New Keynesian \| Business Cycles \| Inflation

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Extent:	application/pdf
Series:	Macroeconomics.
Type of publication:	Book / Working Paper
Notes:	Type of Document - pdf; pages: 24. This paper evaluates NK models using RBC methods and finds that they have difficulty matching the data. 24 pages
Classification:	E - Macroeconomics and Monetary Economics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005126239