Publication Date: February 1992
The Cowles Commission approach is reviewed and compared to the approaches of real business cycle (RBC) theorists and new Keynesian economists. It is argued that RBC models are not tested in a serious enough way and that the new Keynesian literature is not empirical enough for testing even to be a serious possibility. Macroeconomics seems to be moving away from its traditional empirical basis, which is sad. This paper argues for returning to the path that was abandoned by most macroeconomists around 1970, namely the speciﬁcation and testing of structural macroeconometric models.
Macroeconomic models, speciﬁcation testing, model speciﬁcation
JEL Classification Codes: B41, B22
See CFP: 821