2024 Fiscal Year Research-status Report
Business Cycle Accounting with Non-linear Solution Methods
| Project/Area Number |
22K01394
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| Research Institution | Keio University |
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Principal Investigator |
大津 敬介 慶應義塾大学, 商学部(三田), 教授 (50514527)
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| Co-Investigator(Kenkyū-buntansha) |
稲葉 大 専修大学, 経済学部, 教授 (50611315)
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| Project Period (FY) |
2022-04-01 – 2026-03-31
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| Keywords | 景気循環会計 / 非線形解法 / コロナショック |
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| Outline of Annual Research Achievements |
The main aim of this project is to assess the tradeoff between computational efficiency and accuracy across linear and non-linear solution methods. We will analyze the Covid-19 crisis because economic fluctuations are large, which will lead to significant approximation errors in the linear method. We apply the Business Cycle Accounting framework of Chari, Kehoe and McGrattan (2007) because it is a useful method to decomposes economic fluctuations into representative sources. However, it is challenging to solve this model with non-linear methods due to the
computational burden. Therefore, this project will provide new insights not only on the sources of the latest economic crisis, but also tradeoff between computational efficiency and accuracy.
In the first year, we reviewed the literature on solution methods to design our Business Cycle Accounting method. In the second year, we have extended the Business Cycle Accounting method to various settings. The Principal Investigator applied the method to monthly business cycle data to investigate the short run impact of Covid-19 in Japan. The-Co-Investigator implemented the framework to a two-agent model to identify the sources of business cycles and inequality. In the third year, the principal investigator conducted business cycle accounting for Japan and presented it at a workshop. The co-investigator published a working paper based on the two-agent model.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
We have developed business cycle accounting models and corresponding data for analysis using the proposed non-linear solution methods. Preliminary results have already been disseminated: the Co-Investigator presented findings at an international conference and published a working paper, while the Principal Investigator presented at a workshop and is preparing a chapter for an invited publication.
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| Strategy for Future Research Activity |
This year, we will present our research findings at academic conferences and submit them to a peer-reviewed journal.
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| Causes of Carryover |
We were unable to attend international conferences abroad as originally planned. We intend to utilize the remaining funds to participate in international conferences in 2025.
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