James E. Hartley, Kevin D. Salyer and Steven M. Sheffrin, "Calibration and real business cycle models : An unorthodox experiment, " Journal of Macroeconomics 1 9( 1 ), Winter 1 997, pp. 1 - 1 7

Critics of real business cycle models , however, have been uneasy about the empirical methodology used in support of the model. Specifically, these C A L I B RAT I O N A N D R E A l B U S I N E S S C Y C l E MO D E lS 4 9 7 James Hartley, Kevin Salyer and Steven Sheffrin criticisms have focused on the calibration methods used in RBC analysis . The defining characteristics of the calibration approach are : ( i ) the param­ eters of a model are not estimated but instead determined by long-run ( i .e . , steady-state) behavior of the economy and ( i i ) given these parameters, the characteristics of the model's unconditional equilibrium distribution for the endogenous variables are compared to that of the data. This comparison typically involves a limited set of second moments. Recently, due to this criticism, several alternative real business cycles have been estimated rather than calibrated. 1 Kydland and Prescott ( 1991 ) , in response to this criticism, strongly defend calibration as a scientific method. In addition, Hoover ( 1995) also finds some virtues in this approach on philosophical and methodological grounds .