Beyond the DSGE straitjacket
Pesaran, M.H. and Smith, Ron P. (2011) Beyond the DSGE straitjacket. Working Paper. CESifo Group, Munich, Germany.
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Abstract
Academic macroeconomics and the research department of central banks have come to be dominated by Dynamic, Stochastic, General Equilibrium (DSGE) models based on micro-foundations of optimising representative agents with rational expectations. We argue that the dominance of this particular sort of DSGE and the resistance of some in the profession to alternatives has become a straitjacket that restricts empirical and theoretical experimentation and inhibits innovation and that the profession should embrace a more flexible approach to macroeconometric modelling. We describe one possible approach.
Metadata
| Item Type: | Monograph (Working Paper) |
|---|---|
| Additional Information: | CESifo Working Paper Series 3447 |
| Keyword(s) / Subject(s): | macroeconometric models, DSGE, VARs, long run theory |
| School: | Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School |
| Research Centres and Institutes: | Applied Macroeconomics, Birkbeck Centre for, Innovation Management Research, Birkbeck Centre for |
| Depositing User: | Sarah Hall |
| Date Deposited: | 12 May 2014 12:29 |
| Last Modified: | 02 Aug 2023 17:10 |
| URI: | https://eprints.bbk.ac.uk/id/eprint/9704 |
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