The Macroeconomic Effects of Fiscal Policy: Linking an Econometric Model with Theory
AbstractIn this paper, the authors outline a method, termed 'theoretical reconstruction,' which allows the system properties of any econometric macromodel to be related to a simpler theoretical model. First, elements of the econometric model which involve significant additional theoretical complexity compared to the theory model are removed. This process continues until the properties of the 'deconstructed' econometric model match those of the reference theory. Second, the econometric model is gradually reconstructed, noting at each point how each element of additional complexity influences the model properties. The technique is illustrated using fiscal policy changes and the U.K. econometric model COMPACT. Coauthors are Julia Darby, Jonathan Ireland, and Ottavio Ricchi. Copyright 1996 by Royal Economic Society.
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 106 (1996)
Issue (Month): 436 (May)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
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by Mainly Macro in Mainly Macro on 2014-04-19 23:36:00
by himaginary in himaginaryの日記 on 2014-04-20 00:00:00
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- Marcus R. Keogh-Brown & Simon Wren-Lewis & W. John Edmunds & Philippe Beutels & Richard D. Smith, 2010. "The possible macroeconomic impact on the UK of an influenza pandemic," Health Economics, John Wiley & Sons, Ltd., vol. 19(11), pages 1345-1360.
- Garratt, Anthony & Lee, Kevin C & Pesaran, M. Hashem & Shin, Yongcheol, 1998.
"A Structural Cointegrating VAR Approach to Macroeconometric Modelling,"
Cambridge Working Papers in Economics
9823, Faculty of Economics, University of Cambridge.
- A Garratt & K Lee & M H Pesaran & Yongcheol Shin, 1999. "A structural cointegrating VAR approach to macroeconometric modelling," ESE Discussion Papers 8, Edinburgh School of Economics, University of Edinburgh.
- Darby, Julia & Ireland, Jonathan & Leith, Campbell & Wren-Lewis, Simon, 1998. "COMPACT: a rational expectations, intertemporal model of the United Kingdom economy," Economic Modelling, Elsevier, vol. 16(1), pages 1-52, January.
- S. Sgherri, 1999.
"Monetary transmission channels, monetary regimes and consumption behaviour,"
WO Research Memoranda (discontinued)
602, Netherlands Central Bank, Research Department.
- S. Sgherri, 2000. "Monetary Transmission Channels, Monetary Regimes and ConsumptionBehaviour," DNB Staff Reports (discontinued) 53, Netherlands Central Bank.
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