An Econometric Model Of The Us Economy: Structural Analysis In 56 Equations
by John J. Heim /
2018 / English / PDF
13 MB Download
This book explores the US economy from 1960 to 2010 using a more
Keynsian, Cowles model approach, which the author argues has
substantial advantages over the vector autoregression (VAR) and
dynamic stochastic general equilibrium (DSGE) models used almost
exclusively today. Heim presents a robust argument in favor of the
Cowles model as an answer to the pressing, unresolved
methodological question of how to accurately model the macroeconomy
so that policymakers can reliably use these models to assist their
decision making. Thirty-eight behavioral equations, describing
determinants of variables such as consumption, taxes, and
government spending, are connected by eighteen identities to
construct a comprehensive model of the real US economy that Heim
then tests across four different time periods to ensure that
results are consistent. This comprehensive demonstration of the
value of a long-ignored model provides overwhelming evidence that
the more Keynesian (Cowles) structural models outperform VAR and
DSGE, and therefore should be the models of choice in future
macroeconomic studies.
This book explores the US economy from 1960 to 2010 using a more
Keynsian, Cowles model approach, which the author argues has
substantial advantages over the vector autoregression (VAR) and
dynamic stochastic general equilibrium (DSGE) models used almost
exclusively today. Heim presents a robust argument in favor of the
Cowles model as an answer to the pressing, unresolved
methodological question of how to accurately model the macroeconomy
so that policymakers can reliably use these models to assist their
decision making. Thirty-eight behavioral equations, describing
determinants of variables such as consumption, taxes, and
government spending, are connected by eighteen identities to
construct a comprehensive model of the real US economy that Heim
then tests across four different time periods to ensure that
results are consistent. This comprehensive demonstration of the
value of a long-ignored model provides overwhelming evidence that
the more Keynesian (Cowles) structural models outperform VAR and
DSGE, and therefore should be the models of choice in future
macroeconomic studies.