We discuss the use of calibration techniques in economic models. Calibration contrasts with estimation in relying on deterministic calculation of model parameter values consistent with data, rather than econometric estimation. The reasons why calibrators use these methods, as well as the main...

Using data for the G7 countries, conditional correlations of employment and productivity are estimated, based on a decomposition of the two series into technology and non-technology components. The picture that emerges is hard to reconcile with the predictions of the standard real business cycle...

The business cycle implications of optimal wage indexation are investigated in a dynamic general equilibrium model with wage contracts. As in Gray's seminal contribution on wage indexation, it is shown that the optimal degree of indexation depends on the relative volatilities of monetary and...