Norges Bank

Working Paper

RBCs and DSGEs: The computational approach to business cycle theory and evidence

Author:
by Özer Karagedikli, Troy Matheson, Christie Smith and Shaun Vahey
Series:
Working Paper
Number:
17/2008

Abstract
Real Business Cycle (RBC) and Dynamic Stochastic General Equilibrium (DSGE) methods have become essential components of the macroeconomist’s toolkit. This literature review stresses recently developed techniques for computation and inference, providing a supplement to the Romer (2006) textbook, which stresses theoretical issues. Many computational aspects are illustrated with reference to the simple divisible labour RBC model. Code and US data to replicate the computations are provided on the Internet, together with a number of appendices providing background details.

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ISSN 1502-8190 (online)

Published 27 October 2008 13:30
Published 27 October 2008 13:30