Economists, Incentives, Judgment, and the European CVAR Approach to Macroeconometrics
Open Access
- 2 April 2009
- journal article
- Published by Walter de Gruyter GmbH in Economics: The Open-Access, Open-Assessment E-Journal
Abstract
This paper argues that the DSGE approach to macroeconometrics is the dominant approach because it meets the institutional needs of the replicator dynamics of the profession, not because it is necessarily the best way to do macroeconometrics. It further argues that this “DSGE theory-first” approach is inconsistent with the historical approach that economists have advocated in the past and that the alternative European CVAR approach is much more consistent with economist’s historically used methodology, correctly understood. However, because the European CVAR approach requires explicit researcher judgment, it does not do well in the replicator dynamics of the profession. The paper concludes with the suggestion that there should be an increase in dialog between the two approaches.Keywords
This publication has 29 references indexed in Scilit:
- Convergence in Macroeconomics: Elements of the New SynthesisAmerican Economic Journal: Macroeconomics, 2009
- CommentsJournal of Economic Perspectives, 2008
- Modern Macroeconomics in Practice: How Theory Is Shaping PolicyJournal of Economic Perspectives, 2006
- Confronting the Economic Model with the DataPublished by Cambridge University Press (CUP) ,2006
- The Past as the Future: The Marshallian Approach to Post Walrasian EconometricsPublished by Cambridge University Press (CUP) ,2006
- General-to-Specific Modeling: An Overview and Selected BibliographySSRN Electronic Journal, 2005
- The Scientific Illusion in Empirical MacroeconomicsThe Scandinavian Journal of Economics, 1991
- Dynamical Coupling with Especial Reference to Markets Having Production LagsEconometrica, 1947
- The Present Position of Economic ScienceEconomica, 1930
- Mr. Hawtrey on the Scope of EconomicsEconomica, 1927