This paper applies a new Bayesian framework laid out in Faust and Gupta (2009) for evaluating the suitability of dynamic stochastic general equilibrium (DSGE) models for the task of monetary policy analysis. The paper characterizes practical monetary policy analysis as determining how intended policy should be revised in light of the structural interpretation of incoming news. The news is defin...

This paper estimates fiscal policy multipliers for small states using two distinct models: an empirical forecast error model with data from twenty-three across the world, and a dynamic stochastic general equilibrium (DSGE) calibrated to hypothetical state’s economy. We find that, in short term, government consumption investment are both about 0.4, on average, DSGE baseline results, they affecte...

This thesis is concerned with three questions: first, how can the effects macroeconomic policy has on the economy in general be estimated? Second, what are the effects of a pre-announced increase in government expenditures? Third, how should monetary policy be conducted, if the policymaker faces uncertainty about the economic environment. In the first chapter I suggest to estimate the effects o...

depending on the assumptions that are made in new keynesian models, one can attain different new keynesian phillips curves. in this study, three different new keynesian phillips curves and two different central bank behavioural functions are presented which leaves six new keynesian dsge models to study. the purpose of this study is the comparison of these six models and selecting the best model...

This study explores three alternative econometric interpretations of dynamic, stochastic general equilibrium (DSGE) models. (1) A strong econometric interpretation takes the model literally and directly produces a likelihood function for observed prices and quantities. It is widely recognized that under this interpretation, most DSGE models are rejected using classical econometrics and assigned...

We introduce arbitrary precision arithmetic to resolve practical difficulties arising in the identification analysis of dynamic stochastic general equilibrium (DSGE) models. A three-step procedure is proposed address local and global empirical distance between The method applied monetary fiscal policy interaction models, revealing exact observational equivalence a small-scale model an indetermi...

Households in this model consume goods, supply labor, hold money, and save through both bonds and capital (the households own the capital stock). The household block is a little different from how we’ve been working thus far. We assume that there is variable utilization of capital, ut. We assume that the household chooses ut and then leases capital services, k̂t = utkt to the firms, who in turn ...

This paper surveys the treatment of expectations in estimated Dynamic Stochastic General Equilibrium (DSGE) macroeconomic models. A recent notable development in the empirical macroeconomics literature has been the rapid growth of papers that build structural models, which include a number of frictions and shocks, and which are confronted with the data using sophisticated full-information econo...