Comparing DSGE-VAR forecasting models: How big are the differences?

B-Tier
Journal: Journal of Economic Dynamics and Control
Year: 2009
Volume: 33
Issue: 4
Pages: 864-882

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

I generate priors for a vector autoregression (VAR) from a standard real business cycle (RBC) model, an RBC model with capital-adjustment costs and habit formation, and a sticky-price model with an unaccommodating monetary authority. The response of hours worked to a TFP shock differs sharply across these models. I compare the accuracy of forecasts made from each of the resulting dynamic stochastic general equilibrium vector autoregression (DSGE-VAR) models. Despite having different structural characteristics, the DSGE-VARs are comparable in terms of forecasting performance. As in previous work, DSGE-VARs compare favorably with atheoretical VARs.

Technical Details

RePEc Handle
repec:eee:dyncon:v:33:y:2009:i:4:p:864-882
Journal Field
Macro
Author Count
1
Added to Database
2026-01-25