Erceg, Christopher J.; Guerrieri, Luca; Gust, Christopher - In: Journal of the European Economic Association 3 (2005) 6, pp. 1237-1278
Galí's innovative approach of imposing long-run restrictions on a vector autoregression (VAR) to identify the effects of a technology shock has become widely utilized. In this paper, we inves-tigate its reliability through Monte Carlo simulations using calibrated business cycle models. Overall,...