Adaptive Least Squares (ALS), i.e. recursive regression with asymptotically constant gain, as proposed by Ljung (1992), Sargent (1993, 1999), and Evans and Honkapohja (2001), is an increasingly widely-used method of estimating time-varying relationships and of proxying agents’...

In this paper I introduce human capital accumulation with time-to-build technology into a real business cycle model. The only driving force is an exogenous shock affecting the long-run equilibrium level of productivity. A positive shock is assumed to generate a rise in the long-run equilibrium...

We formulate and estimate a RBC model with structural changes and with bounded rationality, where the economic agents have to learn about the former. This paper investigates whether the agents’ learning process can generate business cycles fluctuations which are empirically plausible....

Grandmont (1985) found that the parameter space of even the simplest, most classical models are stratified into bifurcation regions. Barnett and He (1999,2002) subsequently found transcritical, codimension-two, and Hopf bifurcation boundaries within the parameter space of the policy-relevant...

We derive a framework (and provide a software toolkit) which allows the dynamic general equilibrium modeller to specify what variables are in households' information sets, and the degree to which these variables are measured with error. We apply this framework to a canonical real business cycle...

This paper documents the out-of-sample forecasting accuracy of the New Keynesian Model for Canadian data. We repeatedly estimate the model over samples of increasing lengths, forecasting out-of-sample one to four quarters ahead at each step. We then compare these forecasts with those arising...