Small is Beautiful?. Entwicklungslinien im Makroökonometrischen Modellbau / Small is Beautiful?. Tendencies in Macroeconometric Modelling
This paper examines macroeconometric-modelling tendencies in the big OECD countries from its beginnings in the 1930s to the 1990s. While the models grew in size, the number of definitions and exogenous variables increased much more than stochastic equations. These trends are the result of demand as well as of supply factors, with technology and information requests playing central roles. Particular attention is given to the question of model size. It is exposed that size should not be central criterion in judging models - size is the result and not the goal of modelling. The often-found association of “small and beautiful” and “big and ugly” is neither an adequate description of alternatives, nor are the associations valid. However, big models often appear as more complex and though this is basically a rather subjective judgment, model builders should devote more resources to make their models (and their practices) more transparent. The trend toward larger models may slow down but will not stop.
Volume (Year): 222 (2002)
Issue (Month): 6 (December)
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