Estimation of Heuristic Switching in Behavioral Macroeconomic Models

The Institute of Economics will hold a seminar meeting as part of its Seminar Series on Tuesday, February 22, 2022: Jiri Kukacka from the Charles University of Prague will present the paper "Estimation of Heuristic Switching in Behavioral Macroeconomic Models".

Abstract:

This paper offers a simulation-based method for the estimation of heuristic switching in nonlinear macroeconomic models. Heuristic switching is an important feature of modeling strategy since it uses simple decision rules of boundedly rational heterogeneous agents. The simulation study shows that the proposed simulated maximum likelihood method identifies the behavioral effects that stay hidden for standard econometric approaches. In the empirical application, the authors estimate the structural and behavioral parameters of the US economy. They are especially able to reliably identify the intensity of choice that governs the models' nonlinear dynamics.

The seminar will be held in blended mode. In person participation is possible and available seats are allocated on a first come first served basis. For online participation please use the following link.