Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/51775
Authors: 
Pesaran, Hashem
Smith, Ron P.
Year of Publication: 
2011
Series/Report no.: 
Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5661
Abstract: 
Academic macroeconomics and the research department of central banks have come to be dominated by Dynamic, Stochastic, General Equilibrium (DSGE) models based on micro-foundations of optimising representative agents with rational expectations. We argue that the dominance of this particular sort of DSGE and the resistance of some in the profession to alternatives has become a straitjacket that restricts empirical and theoretical experimentation and inhibits innovation and that the profession should embrace a more flexible approach to macroeconometric modelling. We describe one possible approach.
Subjects: 
macroeconometric models
DSGE
VARs
long run theory
JEL: 
C1
E1
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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