Franchi, Massimo; Jusélius, Katarina - In: Economics: The Open-Access, Open-Assessment E-Journal 1 (2007) 2007-4, pp. 1-38
data. The cointegrated VAR (CVAR) offers a way of doing so. In this paper we outline a method for translating the … assumptions underlying a DSGE model into a set of testable assumptions on a cointegrated VAR model and illustrate the ideas with … assumptions underlying the DSGE model and, hence, the RBC model are rejected when properly tested. Leaving the RBC model aside, we …