Modelling Behaviour

Nicolas Carnot, Vincent Koen () and Bruno Tissot

Chapter 5 in Economic Forecasting, 2005, pp 103-132 from Palgrave Macmillan

Abstract: Abstract This chapter presents the specifications that are generally adopted to describe agents’ economic behaviour. Section 5.1 deals with enterprise investment (fixed and stockbuilding), which plays a prominent role as a driver of economic fluctuations. Section 5.2 proceeds with household spending (consumption and residential investment). Section 5.3 discusses imports, exports, world demand and competitiveness. Section 5.4 covers employment and Section 5.5 wage-price dynamics. In the process, this chapter surveys the commonly used specifications, including their theoretical underpinnings and their typical results. The presentation draws heavily on error-correction equations, as they are intuitive, enlightening and frequently used by practitioners (see Box 5.1). Estimation methods per se are beyond the scope of this book but are presented in standard econometrics textbooks.

Keywords: Interest Rate; Capital Stock; Real Interest Rate; Producer Price; Wealth Effect (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-00581-5_5

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DOI: 10.1057/9780230005815_5

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