An RBC researcher who picks a few key parameters based on long-run historical averages of the data is probably
A)calibrating a model.
B)using econometric analysis.
C)replicating a model.
D)solving a model analytically.

Question

Quizplus · Accepted Answer

Calibrating a model involves choosing parameters that are consistent with long-run averages or other empirical realities, so the researcher described in the question is most likely calibrating a model. The other answer choices are not as fitting: using econometric analysis would involve more rigorous statistical techniques to estimate relationships between variables, replicating a model would involve recreating an existing model from scratch, and solving a model analytically would involve deriving equations that describe the model's behavior mathematically.

An RBC Researcher Who Picks a Few Key Parameters Based