The Getting of Macroeconomic Wisdom

Adrian Pagan

Chapter 11 in Advances in Macroeconomic Theory, 2001, pp 219-235 from Palgrave Macmillan

Abstract: Abstract As the proverb says, it is wisdom that we want and much of what we do is aimed at acquiring it. On reflection, the acquisition of wisdom is a twostage process. In the first stage ideas are accumulated and explored; in the second those ideas that have withstood the ‘experience test’ are retained and recounted to others as insights. Macroeconometric modelling involves the same dichotomy and it was one that was fruitfully exploited by the Cowles Commission researchers, albeit informally. In the first stage, evidence needs to be assembled and summarized in a convenient and meaningful way, while, in the second, effort is devoted to interpreting the evidence through a set of principles or theories.1 For the Cowles Commission the two stages were represented by the construction of a reduced form and a structure. Thus the distinction has a distinguished history in econometrics. However, all too often it has been ignored and the two stages are blurred together. Indeed, this blurring of the two categories goes back to the very beginnings of macroeconometrics and even features one of the most prominent members of the Cowles Commission, Tjalling Koopmans. The occasion was his famous critique of Burns and Mitchell’s (1947) work on the business cycle.

Keywords: Business Cycle; Asset Price; Data Generate Process; Monetary Economic; Vector Error Correction Model (search for similar items in EconPapers)
Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (3)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: The Getting of Macroeconomic Wisdom (1999)
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: https://EconPapers.repec.org/RePEc:pal:intecp:978-0-333-99275-3_11

Ordering information: This item can be ordered from
http://www.palgrave.com/9780333992753

DOI: 10.1057/9780333992753_11

Access Statistics for this chapter

More chapters in International Economic Association Series from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().