Computing business cycles in emerging economy models
By: Juan Carlos Hatchondo, Leonardo Martinez, Horacio Sapriza
Contributors: Martinez, Leonardo (Economist); Sapriza, Horacio, 1974-; Federal Reserve Bank of Richmond
Series: Working paper -- no. 06-11; Working paper (Federal Reserve Bank of Richmond : Online) -- no. 06-11.
Publisher: Federal Reserve Bank of Richmond
Published: 2006
Place of publication: Richmond, Va.]
Language: eng
Format: [electronic resource] /
Description: "We show that computing business cycles in emerging economy models using the discrete  state space technique may be misleading. We solve the models of sovereign default presented  by Aguiar and Gopinath (2006) using interpolation. We find that the simulated behavior  of the spread is quite different from the behavior obtained using discrete state space. In  fact, some of the results obtained by Aguiar and Gopinath (2006) using discrete state space  are reversed when using interpolation. Our analysis thus provides a new set of benchmark  results for quantitative models of sovereign default."--Federal Reserve Bank of Richmond web site.
Notes: Title from PDF file as viewed on Dec. 18, 2006.

Includes bibliographical references.

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