 Empirical determination of aggregate demand and supply curves: The example of the RWI Business Cycle ModelUllrich Heilemann and Hagen Findeis Economic Modelling, 2012, vol. 29, issue 2, 158-165 Abstract: Macroeconometric models are often criticised for being too complex and difficult to read in theoretical terms. To overcome these difficulties, Hickman suggested the calculation of a model's implicit aggregate demand/supply (AD/AS) structure. The method helps to understand models and their main properties in theoretical terms and facilitates detailed model comparisons. This paper uses the AD/AS–IS/LM apparatus to analyse the simulation properties of the RWI (Rheinisch-Westfälisches Institut für Wirtschaftsforschung) Business Cycle Model, a medium-sized short-term macroeconometric model for Germany. The results confirm theoretical expectations for AD and AS elasticities and reveal particular reactions linked to peculiar model specifications such as an endogenous government sector. The results are also much in line with a previous study in a multi-country model context. Keywords: AS AD; IS LM model; Econometric modelling; Macroeconometrics; Simulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:2:p:158-165 DOI: 10.1016/j.econmod.2011.09.003 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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