Investment lags and macroeconomic dynamics

Jung Yong-Gook ()
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Jung Yong-Gook: Department of Economics, Wayne State University, 656 W. Kirby Street, Detroit, MI 48202, USA

The B.E. Journal of Macroeconomics, 2015, vol. 15, issue 1, 113-155

Abstract: This study examines the dynamics and the fit of a time-to-build model. The benchmark model employs the investment adjustment cost specification of Christiano, Eichenbaum, and Evans (2005) and the alternative model utilizes the time-to-build specification of Casares (2006). The Bayesian estimation result conveys the following implications: In general, the time-to-build model generates similar dynamics as the benchmark model. But it does not improve the fit of the model to the data. The model comparison, based on marginal likelihood and simulation results, makes the benchmark model the winner of the horse race.

Keywords: Bayesian estimation; DSGE model; time-to-build (search for similar items in EconPapers)
JEL-codes: C51 E22 E32 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1515/bejm-2013-0180

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