SOME NOTES ON PROBLEMATIC ISSUES IN DSGE MODELS

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216224%3A14560%2F16%3A00091356" target="_blank" >RIV/00216224:14560/16:00091356 - isvavai.cz</a>
Result on the web
<a href="http://dx.doi.org/10.2298/EKA1610079S" target="_blank" >http://dx.doi.org/10.2298/EKA1610079S</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.2298/EKA1610079S" target="_blank" >10.2298/EKA1610079S</a>

Result language
angličtina
Original language name
SOME NOTES ON PROBLEMATIC ISSUES IN DSGE MODELS
Original language description
We review some of the problematic issues in DSGE models, which are currently much discussed in the economics profession. All of these issues are concerned with the DSGE models’ (in)ability to match aspects of macroeconomic variables’ observed behaviour. The optimizing agents framework implies that Ricardian equivalence typically holds, which is clearly at odds with the empirical evidence. A distinguishing feature of DSGE models is the assumption that structural parameters are invariant to policy changes. We argue that not all of them can be considered independent from economic policy. It is typical for DSGE models that agents form rational expectations, which can be considered unrealistic. The typical procedure for estimating a DSGE model is to use revised data. As some empirical studies suggest, a model’s behaviour may be different if real-time data are considered. It is also usually assumed that the monetary authority uses the interest rate as a tool of monetary policy.
Czech name
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Czech description
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Type
J<sub>x</sub> - Unclassified - Peer-reviewed scientific article (Jimp, Jsc and Jost)
CEP classification
AH - Economics
OECD FORD branch
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Publication year
2016
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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