An application of business cycle accounting with misspecified wedges

Masaru Inaba and Kengo Nutahara

Review of Economic Dynamics, 2012, vol. 15, issue 2, pages 265-269

Abstract: It is often assumed that wedges evolve according to VAR(1) in the applications of business cycle accounting (BCA). However, recent research finds that the wedges have no VAR(1) representation in many dynamic stochastic general equilibrium (DSGE) economies, and that there might be a misspecification of the stochastic process of wedges. In order to assess the empirical usefulness of BCA, we apply BCA to a widely used medium-scale DSGE economy. Based on our experiments, we find that the accuracy of the measurement of wedges is high enough to capture the business cycle implications of wedges. (Copyright: Elsevier)

Keywords: Business cycle accounting; Misspecification (search for similar items in EconPapers)
JEL-codes: E10 E32 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://dx.doi.org/10.1016/j.red.2012.01.004
Access to full texts is restricted to ScienceDirect subscribers and institutional members. See http://www.sciencedirect.com/ for details.

Related works:
Software Item: Code files for "An application of business cycle accounting with misspecified wedges" (2012)
Working Paper: Technical Appendices to "An application of business cycle accounting with misspecified wedges" (2012)
Working Paper: An Application of Business Cycle Accounting with Misspecified Wedges (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:red:issued:08-173

Ordering information: This journal article can be ordered from
http://www.EconomicDynamics.org/RED17.htm

Access Statistics for this article

Review of Economic Dynamics is edited by Gianluca Violante

More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics
Address: Review of Economic Dynamics Academic Press Editorial Office 525 "B" Street, Suite 1900 San Diego, CA 92101
Contact information at EDIRC.
Series data maintained by Christian Zimmermann ().