Discussion Paper Details
Please find the details for DP7539 in an easy to copy and paste format below:
Title: The 'Puzzles' Methodology: en route to Indirect Inference?
Author(s): Vo Phuong Mai Le, Patrick Minford and Michael R. Wickens
Publication Date: November 2009
Keyword(s): anomaly, Bootstrap, DSGE, indirect inference, puzzle, US-EU Model, VAR and Wald statistic
Programme Area(s): International Macroeconomics
Abstract: We review the methods used in many papers to evaluate DSGE models by comparing their simulated moments with data moments. We compare these with the method of Indirect Inference to which they are closely related. We illustrate the comparison with contrasting assessments of a two-country model in two recent papers. We conclude that Indirect Inference is the proper end point of the puzzles methodology.
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Le, V, Minford, P and Wickens, M. 2009. 'The 'Puzzles' Methodology: en route to Indirect Inference?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7539