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for durable goods; the model relies on the standard theory of intertemporal consumer choice and the trade off between … theory provides a reasonable framework for interpreting these responses for plausible parameter values …
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Long run neutrality restrictions have been widely used to identify structural shocks in VAR models. This paper revisits the seminal paper by Blanchard and Quah (1989), and investigates their identification scheme. We use structural VAR models with smoothly changing covariances for identification...
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