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Horizons of Understanding: A Review of Ray Fair's Estimating How the Macroeconomy Works

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  • Jesús Fernández-Villaverde

Abstract

Ray Fair's Estimating How the Macroeconomy Works is the latest in a series of books by Fair that build, estimate, and apply his macroeconometric model to study the U.S. economy. In this book, Fair updates the model to incorporate the most recent data and uses it to analyze several important empirical questions, such as whether the U.S. economy moved into a new age of high productivity in the last half of the 1990s and the dynamics of prices, output, and unemployment. This review places his work in the context of the historical evolution of aggregate econometric models, compares it with the current developments in the estimation of dynamic stochastic general equilibrium models, and discusses some salient aspects of Fair’s contributions.

Suggested Citation

  • Jesús Fernández-Villaverde, 2008. "Horizons of Understanding: A Review of Ray Fair's Estimating How the Macroeconomy Works," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 685-703, September.
  • Handle: RePEc:aea:jeclit:v:46:y:2008:i:3:p:685-703
    Note: DOI: 10.1257/jel.46.3.685
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    References listed on IDEAS

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    Cited by:

    1. Golinelli, Roberto & Parigi, Giuseppe, 2014. "Tracking world trade and GDP in real time," International Journal of Forecasting, Elsevier, vol. 30(4), pages 847-862.
    2. Fabio Bacchini & Cristina Brandimarte & Piero Crivelli & Roberta De Santis & Marco Fioramanti & Alessandro Girardi & Roberto Golinelli & Cecilia Jona-Lasinio & Massimo Mancini & Carmine Pappalardo & D, 2013. "Building the core of the Istat system of models for forecasting the Italian economy: MeMo-It," Rivista di statistica ufficiale, ISTAT - Italian National Institute of Statistics - (Rome, ITALY), vol. 15(1), pages 17-45.

    More about this item

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

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