Chang, Yongsung; Doh, Taeyoung; Schorfheide, Frank - Federal Reserve Bank of Philadelphia - 2006
The time series fit of dynamic stochastic general equilibrium (DSGE) models often suffers from restrictions on the long-run dynamics that are at odds with the data. Relaxing these restrictions can close the gap between DSGE models and vector autoregressions. This paper modifies a simple...
