Using Monte Carlo experiments, we examine the performance of Indirect Inference tests of DSGE models, usually versions … substantial so that a false model will tend to be rejected by all three; but that the power of the indirect inference tests are by … far the greatest, necessitating re-estimation by indirect inference to ensure that the model is tested in its fullest …

We investigate the relative roles of monetary policy and shocks in causing the Great Moderation, using indirect … inference where a DSGE model is tested for its ability to mimic a VAR describing the data. A New Keynesian model with a Taylor …