ABSTRACT
This paper examines the calibration methodology used in real business cycle (RBC) theory. We confront the calibrator with data from artificial economies (various Keynesian macroeconomic models) and examine whether a prototypical real business cycle model, when calibrated to these data sets using standard methods, can match a selected set of sample moments. We find that the calibration methodology does constitute a discriminating test in that the calibrated real business cycle models cannot match the moments from all the artificial economies we study. In particular, we find the RBC model can only match the moments of economies whose moments are close to actual U.S. data.
