MACAU77 aliansi Bond Economics: Models Are Not Frequency Invariant

MACAU77 aliansi If we create multiple discrete time models of the same mathematical system, and those models are at different frequencies, those models will result in different outputs if those outputs are converted back to a common frequency. For example, this means that the output of an economic model which runs at a monthly frequency will have different outputs than a quarterly model, if we convert the monthly time series into quarterly. This is unfortunate, but this is generally going to be a small problem relative to the other problems economic models face. We only need to worry about this effect if we have an extremely low frequency, such as seen in some overlapping generations (OLG) models.