Logo
Munich Personal RePEc Archive

How accounting accuracy affects DSGE models

Kim, Minseong (2016): How accounting accuracy affects DSGE models.

This is the latest version of this item.

[thumbnail of MPRA_paper_71266.pdf]
Preview
PDF
MPRA_paper_71266.pdf

Download (259kB) | Preview

Abstract

This paper explores how accounting consistency affects DSGE models. As many DSGE models descended from real business cycle models, I explore a simple labor-only RBC model and then a simple capital-and-labor RBC model with an exogenous external sector introduced. The conclusion reached in this paper is that once an external sector is introduced, DSGE models may suffer from accounting inconsistency, unless disequilibrium or some non-orthodox theory of price level, real monetary supply or bonds is accepted. Then this paper explores several other cases that suffer from accounting inconsistency even without introduction of an external sector. In some of these cases, deficit spending may be a key to not falling into disequilibrium.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.