Non Stationary Shocks, Crises and Policy
David Meenagh and
A. Patrick Minford
Rivista italiana degli economisti, 2012, issue 2, 191-224
A Real Business Cycle model of the UK is developed to account for the behaviour of UK non-stationary macro data. The model, when tested by the method of indirect inference, can explain the behaviour of main variables (GDP, real exchange rate, real interest rate). We use it to explain how "crisis" and "euphoria" are endemic in capitalist behaviour due to Non-stationarity; and we draw some policylessons.
Keywords: Non-stationarity; Productivity; Real Business Cycle; Bootstrap; Indirect Inference; Banking Crisis; Banking Regulation (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:mul:jqat1f:doi:10.1427/37494:y:2012:i:2:p:191-224
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