Simulation methods are revolutionizing the practice of applied economic analysis. In this book, leading researchers from around the world discuss interpretation issues, similarities and differences across alternative models, and propose practical solutions for the choice of the model and...

We implement a long-horizon static and dynamic portfolio allocation involving a risk-free and a risky asset. This model is calibrated at a quarterly frequency for ten European countries. We also use maximum-likelihood estimates and Bayesian estimates to account for parameter uncertainty. We find...