EconPapers    
Economics at your fingertips  
 

Estimating the Euler equation for output

Jeffrey Fuhrer and Glenn Rudebusch

No 2002-12, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: New Keynesian macroeconomic models have generally emphasized that expectations of future output are a key factor in determining current output. The theoretical motivation for such forward-looking behavior relies on a straightforward generalization of the well-known Euler equation for consumption. In this paper, we use maximum likelihood and generalized method of moments (GMM) methods to explore the empirical importance of output expectations. We find little evidence that rational expectations of future output help determine current output, especially after taking into account the small-sample bias in GMM.

Keywords: Consumption (Economics); Productivity (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.frbsf.org/economic-research/files/wp02-12bk.pdf (application/pdf)

Related works:
Journal Article: Estimating the Euler equation for output (2004) Downloads
Working Paper: Estimating the Euler equation for output (2002) Downloads
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: https://EconPapers.repec.org/RePEc:fip:fedfwp:2002-12

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().

 
Page updated 2025-03-31
Handle: RePEc:fip:fedfwp:2002-12