How Accounting Accuracy Affects DSGE Models

@article{Kim2016HowAA,
  title={How Accounting Accuracy Affects DSGE Models},
  author={Bryceson Kim},
  journal={ERN: Neoclassical (Topic)},
  year={2016}
}
  • Bryceson Kim
  • Published 29 March 2016
  • Economics
  • ERN: Neoclassical (Topic)
This paper explores how accounting consistency affects DSGE models. As many DSGE models descended from real business cycle models, I explore a simple labor-only RBC model with an exogenous external sector introduced. The conclusion reached in this paper is that once an external sector is introduced, DSGE models may suffer from accounting inconsistency, unless disequilibrium or some non-orthodox theory of price level, real monetary supply or bonds is accepted. 
View on SSRN
mpra.ub.uni-muenchen.de
2 Citations
Background Citations
2

2 Citations

Citation Type

Citation Type

The Role of Money in New Keynesian Models
This paper points out a simple but important “money” issue in New Keynesian models. Once central bank-controlled bonds are included as part of the household budget constraint, New Keynesian models…
The perils of first-order conditions of New Keynesian models
For deriving equilibrium of sticky-price/monopolistic competition New Keynesian models, first-order conditions are often used. This paper shows that they may not be sufficient and presents a case out…

References

SHOWING 1-6 OF 6 REFERENCES
Shocks and Frictions in U.S. Business Cycles: A Bayesian DSGE Approach
Using a Bayesian likelihood approach, we estimate a dynamic stochastic general equilibrium model for the US economy using seven macro-economic time series. The model incorporates many types of real…
The Effects of a Money-Financed Fiscal Stimulus
Are Government Bonds Net Wealth?
  • R. Barro
  • Economics
    Journal of Political Economy
  • 1974
The assumption that government bonds are perceived as net wealth by the private sector is crucial in demonstrating real effects of shifts in the stock of public debt. In particular, the standard…
Sticky Prices in the United States
It has often been argued that prices are sticky in the United States. However, the empirical papers that have claimed to support this view have not reflected any formal behavioral theory. This paper…
Solving the new Keynesian model in continuous time
We show how to formulate and solve the new Keynesian model in continuous time. In our economy, monopolistic firms engage in infrequent price setting a la Calvo. We introduce shocks for preferences,…
New Keynesian Model in Continuous Time”, Slides
  • 2012