Does the form of the Aggregate Production Function Matter for Modelling Business Cycle Fluctuations? Lessons for Bulgaria (1999-2018)

(Pages 81-86)

Aleksandar Vasilev*
Lecturer, Lincoln International Business School, UK.
DOI: https://doi.org/10.35341/1923-7529.2020.18.09

Abstract:

We introduce a constant-elasticity-of-substitution (CES) production function into a real-business-cycle setup with a government sector. We calibrate the model to Bulgar- ian data for the period following the introduction of the currency board arrangement (1999-2018). We investigate the quantitative importance of the degree of substitutabil- ity between labor and capital in the aggregate production function, and found that aspect to matter relatively little for the ability of the model to match the magnitude of the observed business cycle fluctuations.

Keywords:

business cycles, CES aggregate production function, Bulgaria.


JEL Classification Codes:

E24, E32


How to Cite:

Aleksandar Vasilev. Does the form of the Aggregate Production Function Matter for Modelling Business Cycle Fluctuations? Lessons for Bulgaria (1999-2018). [ref]: vol.18.2020. available at: https://refpress.org/ref-vol18-a9/


Licensee REF Press
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