Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/222985
Authors: 
Vasilev, Aleksandar
Year of Publication: 
2020
Citation: 
[Journal:] Journal of Economics and Development [ISSN:] 1859-0020 [Issue:] Forthcoming
Abstract: 
Purpose: We introduce non-Ricardian ("hand-to-mouth") myopic agents into an otherwise standard real-business-cycle (RBC) setup augmented with a detailed government sector.We investigate the quantitative importance of the presence of non-optimizing households for cyclical fluctuations in Bulgaria. Design Methodology/approach: We calibrate the RBC model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2018). Findings: We 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.
Subjects: 
business cycles
non-Ricardian households
hand-to-mouth
myopic behavior
Bulgaria
JEL: 
E24
E32
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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