TY - JOUR
T1 - How the basic RBC model fails to explain US time series
AU - Chow, Gregory C.
AU - Kwan, Yum K.
PY - 1998/2/27
Y1 - 1998/2/27
N2 - By examining the reduced form equations implied by an RBC model this paper shows how it fails in explaining the dynamic characteristics of the US time series using time-domain analysis. In particular, by studying the serial correlation of the residuals of the reduced form and by introducing lagged dependent variables, important propagation mechanisms left out in the model can be clearly discerned and reformations to improve the model can be evaluated.
AB - By examining the reduced form equations implied by an RBC model this paper shows how it fails in explaining the dynamic characteristics of the US time series using time-domain analysis. In particular, by studying the serial correlation of the residuals of the reduced form and by introducing lagged dependent variables, important propagation mechanisms left out in the model can be clearly discerned and reformations to improve the model can be evaluated.
KW - Dynamic optimization
KW - Real business cycle model
UR - http://www.scopus.com/inward/record.url?scp=0039498260&partnerID=8YFLogxK
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-0039498260&origin=recordpage
U2 - 10.1016/S0304-3932(97)00074-3
DO - 10.1016/S0304-3932(97)00074-3
M3 - RGC 21 - Publication in refereed journal
SN - 0304-3932
VL - 41
SP - 301
EP - 318
JO - Journal of Monetary Economics
JF - Journal of Monetary Economics
IS - 2
ER -