What do RBC economists mean by the term calibration?
A)Modifying the structure of an economic theory to strengthen its logic
B)Changing a theory as the economy changes
C)Working out a detailed numerical example of a more general theory
D)Writing out the implications of a theory for all the main economic variables

Question

Quizplus · Accepted Answer

Calibration refers to working out a detailed numerical example of a more general theory, typically using actual data to estimate specific parameters and make predictions. This allows economists to test the validity of their theories and improve their accuracy.

What Do RBC Economists Mean by the Term Calibration