accumulation only worsens this problem. Increasing the volatility of interest rates through habits partly reduces the size of these … positions but at the cost of introducing extreme volatility in asset holdings. Across these simulations we find no presumption … the required positions, worsens their volatility and in some cases produces instability in debt holdings. We conclude that …

estimation for DSGE models approximated up to third-order and provides the foundation for indirect inference and SMM when …