Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19713
Authors: 
Knüppel, Malte
Year of Publication: 
2008
Series/Report no.: 
Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank 2008,01
Abstract: 
In this paper, we investigate the ability of a modified RBC model to reproduce asymmetries observed for macroeconomic variables over the business cycle. In order to replicate the empirical skewness of major U.S. macroeconomic variables, we introduce a capacity constraint into an otherwise prototypical RBC model. This constraint emerges due to the assumption of kinked marginal costs of utilization, where the kink is located at a utilization rate of 100 percent. We find that a model with a suitably calibrated cost function reproduces the empirical coefficients of skewness remarkably well.
Subjects: 
Capacity utilization
capacity constraints
asymmetry
RBC model
JEL: 
E32
Document Type: 
Working Paper

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