F ollowing World War II, the quantity and quality of macroeconomic data expanded dramatically. The most important factor was the regular publication of the National Income and Product Accounts, which contained hundreds of consistently defined and measured statistics that summarized overall economic activity. As the data supply expanded, entrepreneurs realized that a market existed for applying ...

Broadly defined, macroeconomic forecasting is alive and well. Nonstructural forecasting, which is based largely on reduced-form correlations, has always been well and continues to improve. Structural forecasting, which aligns itself with economic theory and hence rises and falls with theory, receded following the decline of Keynesian theory. In recent years, however, powerful new dynamic stocha...

Several papers have documented a regime switch in US monetary policy from ‘passive’ and destabilizing in the pre-1979 period to ‘active’ and stabilizing afterwards. These studies typically work with DSGE models with rational expectations. This paper relaxes the assumption of rational expectations and allows for learning instead. Economic agents form expectations from simple models and update th...

Most studies on the economic impact of HIV/AIDS focus on such variables as GDP growth or income per capita. Early studies, incorporating the impact of HIV/AIDS in a one-sector neoclassical growth model, found that although the impact of HIV/AIDS on GDP growth is substantial, the impact on GDP per capita may well be small. Later studies refined this approach, for example by considering a larger ...

We show that decomposing macroeconomic risks across horizon is key to uncover a tight link between risk premia and the real economy. Exposure in four-year returns to innovations in macroeconomic growth and volatility with a matching half-life of over four years is priced in a wide variety of test assets. Shorter-term risks are not priced. Importantly, we show that long-term growth and volatilit...

Macroeconomic shocks and labour-market institutions jointly determine employment growth and economic performance. The effect of shocks depends on the nature of these institutions and the effect of institutional change depends on the macroeconomic environment. It follows that a given set of institutions may be appropriate in one epoch and not in another. We derive a dynamic model of labour deman...

In the common jargon used by non-specialist commentators in newspapers or TV programs, business cycle downturns are sometimes described in terms of economic collapses, crashes or even earthquakes. Does these comparisons make any sense but for literary license? In particular, are economic recessions and recoveries governed at large by the same statistical law underlying earthquakes' occurrence? ...

Macroeconomics was born as a distinct field in the 1940s, as a part of the intellectual response to the Great Depression. The term then referred to the body of knowledge and expertise that we hoped would prevent the recurrence of that economic disaster. My thesis in this lecture is that macroeconomics in this original sense has succeeded: Its central problem of depression-prevention has been so...

AG represents only one, it’s true that it is very fashionable today, of the new instruments which began to be used lately in the macroeconomic modelling. Here, it may also be mentioned the classification systems, the genetic programming, the models based on agents, the evolutionist games etc. The characteristics of all these methods consist in the effort to detect the internal dynamic processes...

This paper studies a general equilibrium economy in which agents have the ability to invest in a risky technology. The investment risk cannot be fully insured with optimal contracts because shocks are private information. The consideration of these risks changes two of the main conclusions reached in previous studies. First, a positive tax on capital may not be optimal in the long run. Second, ...