Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/182577 
Year of Publication: 
2018
Publisher: 
ZBW – Leibniz Information Centre for Economics, Kiel, Hamburg
Abstract: 
We introduce Epstein-Zin (1989, 1991) preferences into a real-business-cycle setup augmented with a detailed government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2016). We investigate the quantitative importance of the presence of "early resolution of uncertainty" motive for the propagation of cyclical fluctuations in Bulgaria. Allowing for Epstein-Zin preferences improves the model performance against data, and in addition this extended setup dominates the standard RBC model framework, e.g., Vasilev (2009).
Subjects: 
business cycle fluctuations
Epstein-Zin preferences
Bulgaria
JEL: 
E32
E22
E37
Document Type: 
Working Paper

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