CFDP 1525

Natural Concepts in Macroeconomics

Author(s): 

Publication Date: June 2005

Pages: 41

Abstract: 

Ragnar Frisch proposed in 1936 a procedure for estimating natural variable values by modifying what are now called structural macroeconometric models. This paper shows that Frisch’s procedure can be used to illuminate natural concepts using today’s models. The procedure also forces one to be precise regarding the assumptions used in moving from a short-run model to a medium-run or long-run model.

Keywords: 

Natural concepts, Equilibrium

JEL Classification Codes:  E00