Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5101532 | Journal of Monetary Economics | 2017 | 34 Pages |
Abstract
Embedding survey expectations in a standard DSGE model helps to identify key slope parameters in standard relationships; dramatically reduces the need for lagged dependent variables, often motivated by price-indexation and habit formation; and obviates the need for autocorrelated structural shocks in the key equations. Formal statistical tests demonstrate that much of the persistence in aggregate data is better accounted for by slow-moving expectations, rather than by habits, indexation and autocorrelated structural shocks.
Related Topics
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Authors
Jeff Fuhrer,