More shocks than observables
Posted: Tue Jul 22, 2014 10:53 pmHi
Is anybody aware of any potential identification issues when we estimate a DSGE model using more shocks than observables? I understand that estimation becomes easier as we add more shocks to the model, but I was concerned about potential identification issues. Are there any references that you would recommend to understand more about this?
Reuben
Is anybody aware of any potential identification issues when we estimate a DSGE model using more shocks than observables? I understand that estimation becomes easier as we add more shocks to the model, but I was concerned about potential identification issues. Are there any references that you would recommend to understand more about this?
Reuben