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4.6 (An Alia) TFP Process and Excess Consumption Volatility) In this exercise you are asked to show that the SOERBC model can predict consumption to
4.6 (An Alia) TFP Process and Excess Consumption Volatility) In this exercise you are asked to show that the SOERBC model can predict consumption to be more volatile than output when the productivity shock follows an AR(2) process displaying a hump-shaped impulse response. The theoretical model to be used is the EDEIR model presented in Section 4.1.1. Replace the AR(1) process with the following AR(2) specication: In A,+1=1.421n A, 0.43 in A\"! + 6,\
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