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[Washington, D.C.] : International Monetary Fund, ©2010. Genre/Form: Electronic books Additional Physical Format: Print version:Shamloo, Maral.Asset Prices in Affine Real Business Cycle Models.Washington : International Monetary Fund, ©2010 Material Type: Document, Internet resource Document Type: Internet Resource, Computer File All Authors / Contributors: Aytek Malkhozov; Maral Shamloo; International Monetary Fund, Find more information about: Aytek Malkhozov Maral Shamloo ISBN: 1283556588 9781283556583 9781455225446 1455225444 OCLC Number: 704516815 Description: 1 online resource (41 pages) : color illustrations. Contents: Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Setup; A. Preferences; B. Technology; C. Shocks; D. Stationary Version, Equilibrium Conditions and the Solution; E. Log-Normal Risk Adjustment: An Approximation Technique; III. Example 1: RBC with Recursive Preferences; A. Quantities and Prices; B. Log-Normal Risk; C. Theoretical Comparison with Second-Order Perturbation Methods; D. Quantitative Comparison with Second-Order Perturbation Methods; 1. Calibrating the Benchmark Parameters; 2. Comparing Coefficients in Perturbation Method and Log-normal Risk. 1. Comparison of Impulse Responses: Perturbation Method vs. Log-normal Risk2. Comparison of Impulse Responses: Perturbation Method vs. Log-normal Risk; 3. Comparison of Stochastic Steady States: Perturbation Method vs. Log-normal Risk; IV. Example 2: Stochastic Volatility in a Simple Growth Model; A. Qualitative Comparison with Second-Order Perturbation Methods; B. Quantitative Comparison with Second-Order Perturbation Methods; 4. Calibrating the Benchmark Parameters; 5. Stochastic Volatility in Productivity and Implied Stochastic Volatility in Consumption. 3. Stochastic Volatility in Productivity and Implied Stochastic Volatility in Consumption4. Stochastic Volatility in Productivity and Implied Stochastic Volatility in Consumption; C. Stochastic Volatility and Implications for Asset Prices; 5. Consumption Growth and Variance of Consumption Growth; V. Conclusion; A. Equilibrium Conditions; B. Non-Stochastic Steady State; C. Difference Equation Solution; D. Example 1 Solution: Method of Unknown Coefficients; E. Example 2 Solution: Method of Unknown Coefficients; F. Relation to Perturbation Methods; References; Footnotes. Series Title: IMF working paper, WP/10/249. Responsibility: prepared by Aytek Malkhozov and Maral Shamloo. Abstract: We develop a tractable way to solve for equilibrium quantities and asset prices in a class of real business cycle models featuring Epstein-Zin preferences and affine dynamics for productivity growth and volatility. The method relies on log-linearization and exploits the log-normality of all the quantities. It is an easy substitute for more involved numerical techniques, such as higher order perturbation methods, and allows for easy implementation and analytical results. We show explicitly the link with perturbation techniques and find that the quantitative difference between the two is insignificant for several models of interest.

Title : Asset prices in affine real business cycle models
Author : Aytek Malkhozov; Maral Shamloo; International Monetary Fund
Language : en
Rating :
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Type : PDF, ePub, Kindle
Uploaded : Apr 12, 2021

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