Journal article
Reformulating Empirical Macroeconomic Modelling.
- Abstract:
- The policy implications of estimated macro-econometric systems depend on the formulations of their equations, the methodology of empirical model selection and evaluation, the techniques of policy analysis, and their forecast performance. Drawing on recent results in the theory of forecasting, we question the role of "rational expectations"; criticize a common approach to testing economic theories; show that impulse-response methods of evaluating policy are seriously flawed; and question the mechanistic derivation of forecasts from econometric systems. In their place, we propose that expectations should be treated as instrumental to agents' decisions; discuss a powerful new approach to the empirical modelling of econometric relationships; offer viable alternatives to studying policy implications; and note modifications to forecasting devices that can enhance their robustness to unanticipated structural breaks.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
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- Files:
-
-
(Preview, Accepted manuscript, pdf, 167.3KB, Terms of use)
-
- Publisher copy:
- 10.1093/oxrep/16.4.138
Authors
- Publisher:
- Oxford University Press
- Journal:
- Oxford Review of Economic Policy More from this journal
- Volume:
- 16
- Issue:
- 4
- Pages:
- 138 - 159
- Publication date:
- 2000-01-01
- DOI:
- ISSN:
-
0266-903X
- Language:
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English
- UUID:
-
uuid:00f2cdd8-d3d6-4594-8822-014034b94e0a
- Local pid:
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oai:economics.ouls.ox.ac.uk:11297
- Deposit date:
-
2011-08-16
- ARK identifier:
Terms of use
- Copyright holder:
- Oxford University Press
- Copyright date:
- 2000
- Notes:
- Copyright 2000 Oxford University Press and the Oxford Review of Economic Policy Limited. This is a pre-copyedited, author-produced PDF of an article accepted for publication in the Oxford Review of Economic Policy following peer review. The definitive publisher-authenticated version Oxf Rev Econ Policy (2000) 16 (4): 138-159 is available online at: http://oxrep.oxfordjournals.org/
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