The 'Pre-Eminence of Theory' versus the 'General-to-Specific' Cointegrated VAR Perspectives in Macro-Econometric Modeling
AbstractThe primary aim of the paper is to place current methodological discussions on empirical modeling contrasting the 'theory first' versus the 'data first' perspectives in the context of a broader methodological framework with a view to constructively appraise them. In particular, the paper focuses on Colander?s argument in his paper ?Economists, Incentives, Judgement and Empirical Work? relating to the two different perspectives in Europe and the US that are currently dominating empirical macro-econometric modeling and delves deeper into their methodological/philosophical foundations. It is argued that the key to establishing a constructive dialogue between them is provided by a better understanding of the role of data in modern statistical inference, and how that relates to the centuries old issue of the realisticness of economic theories. --
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Economics Discussion Papers with number 2008-25.
Date of creation: 2008
Date of revision:
Econometric methodology; ?general-to-specific?; pre-eminence of theory; VAR; statistical adequacy; realisticness of theory; statistical model;
Find related papers by JEL classification:
- C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
- B4 - Schools of Economic Thought and Methodology - - Economic Methodology
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-07-30 (All new papers)
- NEP-ECM-2008-07-30 (Econometrics)
- NEP-ETS-2008-07-30 (Econometric Time Series)
- NEP-HPE-2008-07-30 (History & Philosophy of Economics)
- NEP-PKE-2008-07-30 (Post Keynesian Economics)
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