We review the methods used in many papers to evaluate DSGE models by comparing their simulated moments with data moments. We compare these with the method of Indirect Inference to which they are ...closely related. We illustrate the comparison with contrasting assessments of a two-country model in two recent papers. We conclude that Indirect Inference is the proper end point of the puzzles methodology.
We examine a two country model of the EU and the US. Each has a small sector of the labour and product markets in which there is wage/price rigidity, but otherwise enjoys flexible wages and prices ...with a one quarter information lag. Using a VAR to represent the data, we find the model as a whole is rejected. However it is accepted for real variables, output and the real exchange rate, suggesting mis-specification lies in monetary relationships. The model highlights a lack of spillovers between the US and the EU.
Calvo contracts, which are the basis of the current generation of New Keynesian models, widely include indexation to general inflation. We argue that the indexing formula should be expected inflation ...rather than lagged inflation. This optimises the welfare of the representative agent in a general equilibrium model of the New Keynesian type. This is shown analytically for a simplified model and by numerical simulation for a full model with price and wage contracts as well as capital. The consequence of such indexation is that monetary policy no longer has any effect on welfare.
We log-linearise the Dellas and Tavlas (DT) model of monetary union and solve it analytically. We find that the intuition of optimal currency analysis of DT's second generation open economy model is ...essentially the same as that of first generation models. Monetary union results in no welfare loss if its member states are symmetric. However, asymmetry causes loss in welfare both due to the failure of the union policy to deal suitably with a country's asymmetric shocks and due to an active monetary policy by union in pursuit of its distinct objectives. The asymmetry in DT is largely due to the differing wage rigidities across countries.
Selenium concentrations in blood, urine, hair, and tap water were determined in samples obtained from individuals exposed to varying amounts of the element via water from home wells. Glutathione ...peroxidase activities were also determined on the blood samples. Correlations of blood Se with the enzyme activity were not statistically significant. Correlations of water Se, urine Se, and hair Se with glutathione peroxidase activity were also not statistically significant. It is concluded that a relationship between Se and glutathione peroxidase activity does not exist when Se status is adequate.
Linear Quadratic Gaussian (LQG) control algorithm linked to Recursive Least Squares (RLS) algorithm has been applied to a multivariate auto-regressive exogenous (MARX) model of ships to construct a ...ship autopilot. It has been found from computer simulation and full-scale experiments aboard a training ship that the autopilot is robust and has good features in both course keeping and course changing.
