The Cowles Commission Approach, Real Business Cycle Theories, and New Keynesian Economics

Ray Fair ()

No 1004, Cowles Foundation Discussion Papers from Cowles Foundation, Yale University

Abstract: 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.

Keywords: Macroeconomic models; specification testing; model specification (search for similar items in EconPapers)
JEL-codes: B41 B22 (search for similar items in EconPapers)
Date: 1992-02
Note: CFP 821.
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Published in Michael T. Belongia and Michelle R. Garfinkel, eds., The Business Cycle: Theories and Evidence, 1992, pp. 133-147

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http://cowles.econ.yale.edu/P/cp/p08a/p0821.pdf (application/pdf)
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Related works:
Working Paper: The Cowles Commission Approach, Real Business Cycle Theories, and New Keynesian Economics (1992)
Journal Article: The Cowles Commission approach, real business cycles theories, and New- Keynesian economics (1992)
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Persistent link: http://EconPapers.repec.org/RePEc:cwl:cwldpp:1004

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