RBCs AND DSGEs: THE COMPUTATIONAL APPROACH TO BUSINESS CYCLE THEORY AND EVIDENCE |
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Authors: | Ö zer Karagedikli, Troy Matheson,Christie Smith,Shaun P. Vahey |
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Affiliation: | Reserve Bank of New Zealand; Norges Bank; Melbourne Business School, Norges Bank and Reserve Bank of New Zealand |
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Abstract: | Abstract. Real business cycle (RBC) and dynamic stochastic general equilibrium (DSGE) methods have become essential components of the macroeconomist's toolkit. This literature review stresses recently developed techniques for computation and inference, providing a supplement to the Romer textbook, which stresses theoretical issues. Many computational aspects are illustrated with reference to the simple divisible labor RBC model. Code and US data to replicate the computations are provided on the internet, together with a number of appendices providing background details. |
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Keywords: | Bayesian analysis Computation DSGE RBC Simulation |
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