Are habits important for the propagation of business cycle fluctuations in Bulgaria?

Aleksandar Vasilev

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: We introduce internal consumption habits into a real-business-cycle setup augmented with a detailed government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2016). We investigate the quantitative importance of the presence of internal consumption habits motive for the propagation cyclical fluctuations in Bulgaria. Allowing for habits in consumption improves the model performance against data, and in addition this extended setup dominates the standard RBC model framework without habits, e.g., Vasilev (2009).

Keywords: Business cycles; consumption habits; Bulgaria (search for similar items in EconPapers)
JEL-codes: E32 E37 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-bec, nep-dge, nep-mac and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Are Habits Important for the Propagation of Business Cycle Fluctuations in Bulgaria? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:182501

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