Approximating multisector New Keynesian models

Carlos Carvalho and Fernanda Nechio

Economics Letters, 2018, vol. 163, issue C, 193-196

Abstract: A three-sector model with a suitably chosen distribution of price stickiness can closely approximate the response to aggregate shocks of New Keynesian models with a much larger number of sectors, allowing for their estimation at much reduced computational cost.

Keywords: Multisector approximation; Heterogeneity; Factor specificity (search for similar items in EconPapers)
JEL-codes: E12 E22 J6 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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Working Paper: Approximating Multisector New Keynesian Models (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:163:y:2018:i:c:p:193-196

DOI: 10.1016/j.econlet.2017.11.032

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