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The Role of Simulation Methods in Macroeconomics

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Abstract

After reviewing the reasons to use solution methods in macroeconomics,this survey paper discusses diferent aspects relative to a rigorous use of the numerical output of such methods. Special attention is paid to suggestions that have been made to incorporate parameter uncertainty. Finally, the need to test for usually maintained assumptions, such as rationality of expectations, is emphasized.

Suggested Citation

  • Alfonso Novales, 2002. "The Role of Simulation Methods in Macroeconomics," Documentos de Trabajo del ICAE 0227, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    • Handle: RePEc:ucm:doicae:0227
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    More about this item

    Keywords

    Numerical solution methods; Rational expectations; Calibration.;
    All these keywords.

    JEL classification:

    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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