Kano, Takashi; Nason, James M. - Graduate School of Economics, Hitotsubashi University - 2012
We study the implications of internal consumption habit for new Keynesian dynamic stochastic general equilibrium … internal consumption habit often improves the ability of NKDSGE models to match the spectra of output and consumption growth …. Nonetheless, the fit of NKDSGE models with internal consumption habit is susceptible to the sources of nominal rigidity, to …