Comment on Gali and Rabanal's "technology shocks and aggregate fluctuations; how well does the RBC model fit postwar U.S. data?"
By: Ellen R. McGrattan.
Series: Federal Reserve Bank of Minneapolis, Research Department staff report ;; 338; Staff report (Federal Reserve Bank of Minneapolis. Research Dept. : Online) ;; 338.
Publisher: Federal Reserve Bank of Minneapolis
Published: 2004
Place of publication: [Minneapolis, Minn.]
Language: eng
Format: Electronic resource
Subjects: Business cycles -- Mathematical models.
Description: "Gali and Rabanal provide statistical evidence that, in their view, puts into question the real business cycle paradigm in favor of the sticky-price paradigm.  I demonstrate that their statistical procedure is easily misled in that they would reach the same conclusions even if their data had been simulated from an RBC model.  I also demonstrate that sticky-price models do a poor job generating U.S.-like business cycles with only shocks to technology, the federal funds rate, and government consumption.  This explains why Gali and Rabanal need large unobserved shocks to preferences and to the degree of monopoly power."--Federal Reserve Bank of Minneapolis web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 11/10/2004.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.