Abstract
This chapter introduces readers to two standard tools for evaluating the solution of a dynamic stochastic general equilibrium (DSGE) model: second moments and impulse response functions. Drawing on these diagnostic tools, Heer and Maußner consider three applications: the benchmark business cycle model, a time-to-build variant of this model, and a New Key-nesian model with consumption habits, investment adjustment costs, and sticky nominal prices and wages for the study of monetary policy.
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© 2024 The Author(s), under exclusive license to Springer Nature Switzerland AG
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Heer, B., Maußner, A. (2024). Perturbation Methods: Model Evaluation and Applications. In: Dynamic General Equilibrium Modeling. Springer Texts in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-031-51681-8_4
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DOI: https://doi.org/10.1007/978-3-031-51681-8_4
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Publisher Name: Springer, Cham
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Online ISBN: 978-3-031-51681-8
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