Bask, Mikael; Madeira, João - Nationalekonomiska Institutionen, Uppsala Universitet - 2011
We outline a dynamic stochastic general equilibrium (DSGE) model with trend extrapolation in asset pricing that we fit to quarterly U.S. macroeconomic time series with Bayesian techniques. To be more precise, we modify the DSGE model in Smets and Wouters (2007) by incorporating asset traders who...