Keynesian and New Classical Models of Unemployment Revisited

Michael McAleer and Colin McKenzie

Economic Journal, 1991, vol. 101, issue 406, 359-81

Abstract: Several Keynesian and New Classical models of unemployment for the United States are reevaluated. The models are examined for adequacy by testing the cross-equation restrictions (where appropriate) and using diagnostic and nonnested tests that explicitly recognize the problem introduced by generated regressors. The best New Classical model for the 1946-73 period is found to be adequate when it is estimated over the 1946-85 period, whereas the Keynesian model is not. Existing results of tests obtained at the single-equation level ignoring generated regressors are not always supported when the test statistics are calculated using the correct covariance matrix or maximum likelihood. Copyright 1991 by Royal Economic Society.

Date: 1991
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Related works:
Working Paper: Keynesian and new classical models of unemployment revisited (1991)
Working Paper: KEYNESIAN AND NEW CLASSICAL MODELS OF UNEMPLOYMENT REVISITED (1990)
Working Paper: Keynesian and new classical models of unemployment revisited (1990)
Working Paper: Keynesian and new classical models of unemployment revisited (1990)
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