Economics Research Institute Study Paper
Utah State University Department of Economics
Copyright for this work is held by the author. Transmission or reproduction of materials protected by copyright beyond that allowed by fair use requires the written permission of the copyright owners. Works not in the public domain cannot be commercially exploited without permission of the copyright owner. Responsibility for any use rests exclusively with the user. For more information contact the Institutional Repository Librarian at email@example.com.
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.