EconPapers    
Economics at your fingertips  
 

Testing calibrated general equilibrium models

Fabio Canova () and Eva Ortega ()

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: This paper illustrates the philosophy which forms the basis of calibration exercises in general equilibrium macroeconomic models and the details of the procedure, the advantages and the disadvantages of the approach, with particular reference to the issue of testing ``false'' economic models. We provide an overview of the most recent simulation--based approaches to the testing problem and compare them to standard econometric methods used to test the fit of non--linear dynamic general equilibrium models. We illustrate how simulation--based techniques can be used to formally evaluate the fit of a calibrated model to the data and obtain ideas on how to improve the model design using a standard problem in the international real business cycle literature, i.e. whether a model with complete financial markets and no restrictions to capital mobility is able to reproduce the second order properties of aggregate saving and aggregate investment in an open economy.

Keywords: Calibration; simulation; evaluation; saving and investment correlations (search for similar items in EconPapers)
JEL-codes: C15 C52 D58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp and nep-dge
Date: 1996-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13) Track citations by RSS feed

Downloads: (external link)
https://econ-papers.upf.edu/papers/166.pdf Whole Paper (application/pdf)

Related works:
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:upf:upfgen:166

Access Statistics for this paper

More papers in Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra
Bibliographic data for series maintained by ().

 
Page updated 2019-10-20
Handle: RePEc:upf:upfgen:166