I estimate a log-linearized DSGE model using annual quadratic detrend data. When comparing the theoretical moments with the data, i find that the theoretical standard deviation and variance of the log-linearized variables are large than those in the data. For instance, the theoretical standard deviation of Output is 29 but in the data is only 4. Similarly, when simulating the calibrated model (for counterfactual) using posterior mean, i find a big difference between the actual data and the simulated data. I have seen similar topics in this forum, but I still don’t understand the reasons and the solution.
- Is this difference between data and theoretical moments due to an error in the model?
- Is there any solution?
- Why the theoretical mean value appears zero?
Any help would be much appreciated.
Thanks in advance.