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A Pedagogical Note on the Long Run of Macro Economic Models

Author

Listed:
  • Peter McAdam

Abstract

This paper surveys and motivates the reasons for incorporating explicit long run of supply features into applied estimated macro economic models. It defines some basic stability conditions for such models and illustrates elements of long run considerations with reference to a small (22 equation) prototype model which fashions itself after many current models. It also shows that many of the key decisions when setting up the long run extended simulation horizon reduce to a relatively small number of relationships.

Suggested Citation

  • Peter McAdam, 1998. "A Pedagogical Note on the Long Run of Macro Economic Models," Studies in Economics 9807, School of Economics, University of Kent.
    • Handle: RePEc:ukc:ukcedp:9807
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    File URL: https://www.kent.ac.uk/economics/repec/9807.pdf
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    References listed on IDEAS

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    1. Michel De Vroey & Pierre Malgrange, 2016. "Macroeconomics," Chapters, in: Gilbert Faccarello & Heinz D. Kurz (ed.), Handbook on the History of Economic Analysis Volume III, chapter 27, pages 372-390, Edward Elgar Publishing.
    2. Kenneth F. Wallis & John D. Whitley, 1987. "Long-Run Properties of Large-Scale Macroeconometric Models," Annals of Economics and Statistics, GENES, issue 6-7, pages 207-224.
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    7. Blanchard, Olivier J, 1985. "Debt, Deficits, and Finite Horizons," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 223-247, April.
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    Cited by:

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    2. Myszczyszyn Janusz, 2021. "Development of Transport as a Factor of the Economic Miracle (Wirtschaftswunder) of West Germany," Studia Historiae Oeconomicae, Sciendo, vol. 39(1), pages 189-215, December.

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    Keywords

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    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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