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An RBC model with non-Ricardian households: lessons for Bulgaria (1999–2018)
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Abstract
Purpose – The authors introduce non-Ricardian (“ hand-to-mouth” ) myopic agents into an otherwise standard real-business-cycle (RBC) setup augmented with a detailed government sector. The authors investigate the quantitative importance of the presence of nonoptimizing households for cyclical fluctuations in Bulgaria. Design/methodology/approach – The authors calibrate the RBC model to Bulgarian data for the period following the introduction of the currency board arrangement (1999–2018). Findings – The authors find that the inclusion of such non-Ricardian households improves model performance along several dimensions and generally provides a better match vis-a-vis data, as compared to the standard model populated with Ricardian agents only. Originality/value – This is a novel finding in the macroeconomic studies on Bulgaria using modern quantitative methods.
Description
economic development
Authors
Aleksanda r Vasilev
Advisor
Place of publication
Publisher
Kinh Tế Quốc Dân
Date
2021
ISBN
1984-0020
ISSN
Keywords
Business cycles , Non-Ricardian households , Hand-to-mouth , Myopic behavior , Bulgaria
Citation
Collections
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10-1108_JED-06-2020-0077.pdf
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