IMF paper on enhancing DSGE modelling
An International Monetary Fund paper, published on Monday, finds that dynamic stochastic general equilibrium (DSGE) models that use a wider set of data generate a higher duration of price stickiness and a lower New Keynesian Phillips curve slope.
Maxym Kryshko, the paper's authors, use US data post-1983 on real output, inflation, nominal interest rates, measures of inverse money velocity and a large panel of informational series to compare a data-rich DSGE model with a regular model
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