How many observations are needed to calibrate a DSGE model?

[ManuelTorres]

Hi everyone,.
In most DSGE models they use the series of GDP, consumption, investment, trade balance, etc. and the ratios with respect to GDP, the variance of the series, the relative variances and correlations with the GDP are calculated.

How many observations is the minimum required? In a recent article they use 19 observations with annual data. Can I use 10 observations?

[jpfeifer]

See

Limited number of observations

My answer referred to the fact that using a two-sided HP-filter with just 32 observations will not work because the HP introduces considerable artifacts at the beginning and the end of the sample. If you use 32 observations, essentially your whole sample is affected. With Bayesian estimation, you can “estimate” your model without any data. Your result will simply be your prior. Nevertheless, ideally you want your data to be informative in order to update your prior. When you are dealing with bu…