The Lucas Critique in Light of Swiss Monetary Policy
Lucas (1976) argues that in the event of policy regime changes, regression models are by construction misspecified and therefore behave poorly. Unstable exonometric regressions, however, do not exclude the possibility of an underlying constant behavioral function. When marginal processes are subject to regime shifts, valid conditioning is crucial for parameter constancy. Through tests of exogeneity, proposed recently by Engle and Hendry (1990), the authors examine the legitimacy of conditioning claims for Swiss money demand functions during the 1973-89 period. The implications from their exogeneity results are that the Lucas critique is refuted and the specified money demand function is invariant to changes in monetary policy. Copyright 1991 by Blackwell Publishing Ltd
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 53 (1991)
Issue (Month): 4 (November)
|Contact details of provider:|| Postal: |
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0305-9049
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0305-9049|
When requesting a correction, please mention this item's handle: RePEc:bla:obuest:v:53:y:1991:i:4:p:481-93. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.