Inflation in the Great Recession and New Keynesian Models: Comment

9 Pages Posted: 19 Feb 2019

See all articles by Ray C. Fair

Ray C. Fair

Yale University - Cowles Foundation; Yale School of Management - International Center for Finance

Date Written: February 15, 2019

Abstract

This comment points out mismeasurement of three of the variables in the DSGE model in Del Negro, Giannoni, and Schorfheide (2015). These errors began with the model in Smets and Wouters (2007), and they also exist in other models that use the Smets-Wouters model as a benchmark. The mismeasurement appears serious enough to call into question the reliability of empirical results using these variables.

Keywords: DSGE models, Macro data

JEL Classification: E12, E32, E77

Suggested Citation

Fair, Ray C., Inflation in the Great Recession and New Keynesian Models: Comment (February 15, 2019). Cowles Foundation Discussion Paper No. 2166. Available at SSRN: https://ssrn.com/abstract=3335212 or http://dx.doi.org/10.2139/ssrn.3335212

Ray C. Fair (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
203-432-3715 (Phone)
203-432-6167 (Fax)

HOME PAGE: http://fairmodel.econ.yale.edu

Yale School of Management - International Center for Finance ( email )

Box 208200
New Haven, CT 06520
United States
203-432-3715 (Phone)
203-432-6167 (Fax)

HOME PAGE: http://fairmodel.econ.yale.edu

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