Economics Research Institute Study Paper
Utah State University Department of Economics
We present an alternative method for calibrating high-frequency models where the decision interval is shorter than the data-sampling interval. The standard method for choosing these "high-frequency" parameter values produces internal inconsistencies in the steady-state relations across frequencies. Our approach eliminates these inconsistencies and improves the fit of business cycle models by generating additional labor hours volatility.
Aadland, David and Huang, Kevin X.D., "High-Frequency Calibration" (2002). Economic Research Institute Study Papers. Paper 234.