Empirical Macroeconomics

Is There Empirical Support for the ‘Modern’ View of Macroeconomics?

This paper argues that the basic model of the ‘modern’ view of macroeconomics appears to be a poor approximation of the actual economy.

Bayesian Multivariate Time Series Methods for Empirical Macroeconomics

Macroeconomic practitioners frequently work with multivariate time series models such as VARs, factor augmented VARs as well as timevarying parameter versions of these models (including variants with multivariate stochastic volatility). These models have a large number of parameters and, thus, over-parameterization problems may arise. Bayesian methods have become increasingly popular as a way o...

Stochastic Dynamic Macroeconomics: Theory, Numerics and Empirical Evidence

Federal Reserve Bank of MinneapolisInstitute for Empirical Macroeconomics

Often, researchers wish to analyze nonlinear dynamic discrete-time stochastic models. This paper provides a toolkit for solving such models easily, building on log-linearizing the necessary equations characterizing the equilibrium and solving for the recursive equilibrium law of motion with the method of undetermined coeecients. The innovation here is to demonstrate that log-linearizing the non...

Intertemporal Macroeconomics

This chapter reviews models of intertemporal choice consumption demand and labour supply. We discuss optimal decisions by individuals at the microeconomic level and the implications for the aggregate economy. The chapter describes the equilibrium in a market-clearing neoclassical model and analyses effects of productivity and government sector shocks on optimal decisions by consumers and worker...