Negro, Marco Del; Schorfheide, Frank - In: American Economic Review 99 (2009) 4, pp. 1415-50
Policy analysis with potentially misspecified dynamic stochastic general equilibrium (DSGE) models faces two challenges: estimation of parameters that are relevant for policy trade-offs, and treatment of the deviations from the cross-equation restrictions. Using post-1982 US data, we study the...