Using Monte Carlo experiments, we examine the performance of indirect inference tests of DSGE models in small samples …

Using Monte Carlo experiments, we examine the performance of Indirect Inference tests of DSGE models, usually versions … (using the Likelihood Ratio), and on the Del Negro-Schorfheide DSGE-VAR weight. We find that the power of all three tests is …

Recently, it has been suggested that macroeconomic forecasts from estimated DSGE models tend to be more accurate out …-of-sample than random walk forecasts or Bayesian VAR forecasts. Del Negro and Schorfheide(2013) in particular suggest that the DSGE … Smets and Wouters DSGE model with that of several reduced form time series models. We first demonstrate that none of the …

active learning possibilities has effects on the optimal interest rate rule followed by the central bank. For a wide range of …

. Learning about the transmission process of monetary policy is introduced by having heterogeneous agents - i.e. the central bank …. Here following Evans and Honkapohja (2001), the learning scheme we investigate is that of least-squares learning (recursive … OLS) using the Kalman filter. We find that optimal monetary policy under learning is a policy that separates estimation …