The Heterogeneous State of Modern Macroeconomics: A Reply to Solow

Varadarajan Chari () and Patrick J. Kehoe ()

No 13655, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Robert Solow has criticized our 2006 Journal of Economic Perspectives essay describing "Modern Macroeconomics in Practice." Solow eloquently voices the commonly heard complaint that too much macroeconomic work today starts with a model with a single type of agent. We argue that modern macroeconomics may not end too far from where Solow prefers. He is also critical of how modern macroeconomists use data to construct models. Specifically, he seems to think that calibration is the only way that our models encounter data. To the contrary, we argue that modern macroeconomics uses a wide variety of empirical methods and that this big-tent approach has served macroeconomics well. Solow also questions our claim that modern macroeconomics is firmly grounded in economic theory. We disagree and explain why.

JEL-codes: E12 E13 E2 E20 E21 E22 E32 E4 E5 E52 E58 E6 E62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-dge, nep-hpe and nep-mac
Date: 2007-11
Note: EFG ME PE
View list of references

Downloads: (external link)
http://www.nber.org/papers/w13655.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

Related works:
Working Paper: The heterogeneous state of modern macroeconomics: a reply to Solow (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:13655

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w13655
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().