Government Spending and Consumption-Hours Preferences

@inproceedings{Rabanal2006GovernmentSA,
  title={Government Spending and Consumption-Hours Preferences},
  author={Pau Rabanal and David L{\'o}pez-Salido},
  year={2006}
}
In this paper we present two extensions that have been largely omitted in the recent literature on Bayesian estimation of DSGE models. First, we pay special attention to different forms of complementarity between consumption and hours affecting the households preferences. Second, we allow for the presence of a fraction of non-Ricardian households - i.e. that have limited access to financial markets. We show that exogenous changes in government transfers are crucial to distinguish between the… CONTINUE READING

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M. Uribe
  • Computational methods for the study of dynamic economies
  • 2006
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