Born, Benjamin; Pfeifer, Johannes - In: American Economic Review 104 (2014) 12, pp. 4231-39
We show that the risk-shock business cycle model of Fernández-Villaverde et al. (2011) must be recalibrated because it underpredicts the targeted business cycle moments by a factor of three once a time aggregation error is corrected. Recalibrating the corrected model for the benchmark case of...