Mises Daily
Author:
Frank Shostak
Online Publish Date:
and Edward Prescott (KP) for their contributions in the design of macroeconomic policy and for the identification of the main causes of business cycle fluctuations. as a pseudo laboratory to examine the effectiveness of various fiscal and monetary policies in smoothing out economic fluctuations. The foundation of these models was parameters are concerned. To overcome these complexities KP have introduced an innovative technique, which they labelled calibration. What is calibration all about?