Beyond DSGE Models: Toward an Empirically Based Macroeconomics

David Colander, Peter Howitt, Alan Kirman, Axel Leijonhufvud and Perry Mehrling

Middlebury College Working Paper Series from Middlebury College, Department of Economics

Abstract: This paper argues that macro models should be as simple as possible, but not more so. Existing models are “more so” by far. It is time for the science of macro to step beyond representative agent, DSGE models and focus more on alternative heterogeneous agent macro models that take agent interaction, complexity, coordination problems and endogenous learning seriously. It further argues that as analytic work on these scientific models continues, policy-relevant models should be more empirically based; policy researchers should not approach the data with theoretical blinders on; instead, they should follow an engineering approach to policy analysis and let the data guide their choice of the relevant theory to apply.

Pages: 12 pages
Date: 2008-06
New Economics Papers: this item is included in nep-hpe and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (150)

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http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0808.pdf (application/pdf)

Related works:
Chapter: Beyond DSGE Models: Toward an Empirically Based Macroeconomics (2018)
Journal Article: Beyond DSGE Models: Toward an Empirically Based Macroeconomics (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:mdl:mdlpap:0808

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