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A Real Business Cycle model of the UK is developed to account for the behaviour of UK nonstationary macro data. The model is tested by the method of indirect inference, bootstrapping the errors to generate 95% confidence limits for a VECM representation of the data; we find the model can explain...
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, we study the fluctuation in conditional volatilities and time-varying long-run responses of output growth and inflation … turbulent economic period of high volatility that is only repeated in the 20th century. The repeating patterns in the … conditional volatilities follow the approach of aggregate supply shocks, while most of the inflation responses follow from …
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