Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/223032 
Year of Publication: 
2020
Citation: 
[Journal:] National Accounting Review [ISSN:] 2689-3010 [Issue:] Forthcoming [Publisher:] AIMS Press [Place:] Springfield [Year:] 2020
Publisher: 
AIMS Press, Springfield
Abstract: 
A stochastic discount factor is introduced into a real-business-cycle setup with a government sector. The model is calibrated to Bulgarian data for the period 1999-2018, which is after the introduction of the currency board arrangement. The quantitative importance of shocks to the discount factor is investigated for the propagation of cyclical fluctuations in Bulgaria. In particular, allowing for a stochastic discount factor in the setup improves the model fit vis-a-vis data by increasing variability of employment and wages. However, those improvements are at the cost of increasing the volatility of consumption and investment.
Subjects: 
business cycles
stochastic discount factor
Bulgaria
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)
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