Authors: Ivashchenko, Sergey
Mutschler, Willi
Title: A note on functional equivalence between intertemporal and multisectoral investment adjustment costs
Language (ISO): en
Abstract: Kim (2003, JEDC) shows functional equivalence between intertemporal and multisectoral investment adjustments costs in a linearized RBC model. From an identification point of view, two parameters are not separately distinguishable, they enter as a sum into the linearized solution. We demonstrate that estimating the quadratic approximation of the model provides means to extract more information on the structural parameters from data and thus estimate both parameters that are unidentiable under the log-linearized model.
Subject Headings: identification
investment adjustment costs
nonlinear DSGE
pruning
quadratic approximation
URI: http://hdl.handle.net/2003/35392
http://dx.doi.org/10.17877/DE290R-17433
Issue Date: 2016
Appears in Collections:Sonderforschungsbereich (SFB) 823

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