Franchi, Massimo; Jusélius, Katarina - 2007
. 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 the RBC … assumptions underlying the DSGE model and, hence, the RBC model are rejected when properly tested. Leaving the RBC model aside, we …