A Real-Business-Cycle Model with Endogenous Discounting and a Government Sector

Aleksandar Vasilev

Notas Económicas, 2022, issue 54, 73-86

Abstract: “We introduce an endogenous discount factor as in Uzawa (1968) and Schmitt-Grohe and Uribe (2003) into a real-business-cycle setup with government sector and Greenwood et al. (1988) preferences. We calibrate the artificial economy to Bulgarian data for the period after the currency board arrangement was introduced (1999-2018). In particular, we look into the quantitative importance of endogenous discounting for the propagation of cyclical fluctuations in Bulgaria. We conclude that the presence of an endogenous discount factor improves the model, and that the extended setup performs better than the standard RBC model framework with a constant discount factor (e.g. Vasilev, 2009).”

Keywords: Business cycles; Uzawa preferences; endogenous discounting; Bulgaria. (search for similar items in EconPapers)
JEL-codes: E24 E32 (search for similar items in EconPapers)
Date: 2022
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Journal Article: A Real-Business-Cycle model with endogenous discounting and a government sector (2021)
Working Paper: A Real-Business-Cycle model with endogenous discounting and a government sector (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:gmf:journl:y:2022:i:54:p:73:86

DOI: 10.14195/2183-203X_54_4

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