BIS paper captures financial shock using five DSGE models
Five different models produce five very different estimates of spillovers
There is significant variation in the design of dynamic stochastic general equilibrium (DSGE) models and these differences can produce sharply differing results, even where models share a common core, according to a working paper published by the Bank for International Settlements (BIS) on July 30.
In the paper, a group of eight economists from the Federal Reserve test the predictions of five separate DSGE models they have been working on. The models share common methodologies but take different
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