non identified parameter
Posted: Tue May 16, 2017 9:23 am
Smets and Wouters (2007) in "Shocks and Frictions in US Business Cycles" said (page 7):
Three other parameters are clearly not identified: the steady-state mark-up in the labor market (), which is set at 1.5, and the curvature parameters of the Kimball aggregators in the goods and labor market (), which are both set at 10.
my question is that How to estimate the parameters of this?
Three other parameters are clearly not identified: the steady-state mark-up in the labor market (), which is set at 1.5, and the curvature parameters of the Kimball aggregators in the goods and labor market (), which are both set at 10.
my question is that How to estimate the parameters of this?