Pablo Cuba-Borda, Luca Guerrieri, Matteo Iacoviello, and Molin Zhong | Applied researchers interested in estimating key parameters of DSGE models face an array of choices regarding numerical solution and estimation methods. We focus on the likelihood evaluation of models with occasionally binding constraints. We document how solution approximation errors and likelihood misspeci cation, related to the treatment of measurement errors, can interact and compound each other.
 

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