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Natural Concepts in Macroeconomics

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Abstract

Ragnar Frisch proposed in 1936 a procedure for estimating natural variable values by modifying what are now called structural macroeconometric models. This paper shows that Frisch’s procedure can be used to illuminate natural concepts using today’s models. The procedure also forces one to be precise regarding the assumptions used in moving from a short-run model to a medium-run or long-run model.

Suggested Citation

  • Ray C. Fair, 2005. "Natural Concepts in Macroeconomics," Cowles Foundation Discussion Papers 1525, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:1525
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    References listed on IDEAS

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    6. Ragnar Frisch, 1936. "On the Notion of Equilibrium and Disequilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 3(2), pages 100-105.
    7. Athanasios Orphanides & John C. Williams, 2002. "Robust Monetary Policy Rules with Unknown Natural Rates," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 33(2), pages 63-146.
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    Cited by:

    1. Bårdsen, Gunnar & Nymoen, Ragnar, 2006. "U.S. natural rate dynamics reconsidered," Memorandum 13/2006, Oslo University, Department of Economics.

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    More about this item

    Keywords

    Natural concepts; Equilibrium;

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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