Comment on F. E. Kydland and E. C. Prescott, "The Econometrics of the General Equilibrium Approach to Business Cycles"

摘要: Real business cycle theory is cast in a competitive general equilibrium setting with infinitely lived households and propagation mechanism allowing real shocks to produce fluctuations. The models show that substantial fluctuations can be generated by (technology) framework thus reflect Pareto-efficient response changes intertemporal possibilities for substitution. central point of this finding do not necessarily inefficiencies as often implicitly implied by, particular, the Keynesian literature. This an observation which most people would accept, although there are reservations concerning assumptions underlying models, importance observation. However, new empirical approach known calibration has also come associated models. Authors belonging branch literature interpret results such calibrations justification their theories. Prescott (1986, p. 38) goes far conclude "... predicts what observed. Indeed, if economy did display phenomena, puzzle". Although it uncontroversial regard - previously simulations useful way illustrating properties theoretical having complexity precludes analytical solution, less obvious seen test theory. Actually, protagonists theories tend go even further suggesting methodology logical consequence approach. raises question, "does teach us something about model or reality?"