CFDP 2166

Inflation in the Great Recession and New Keynesian Models: Comment


Publication Date: February 2019

Pages: 9


This comment points out mismeasurement of three of the variables in the DSGE model in Del Negro, Giannoni, and Schorfheide (2015). These errors began with the model in Smets and Wouters (2007), and they also exist in other models that use the Smets-Wouters model as a benchmark. The mismeasurement appears serious enough to call into question the reliability of empirical results using these variables.

Keywords: DSGE models, Macro data

JEL Classification Codes: E12, E32, E77

JEL Classification Codes: E12E32

See CFDP Version(s): CFDP 2166RCFDP 2166R2