Abstract
A reality check on dynamic, stochastic general equilibrium (DSGE) models was overdue and Servaas Storm has filled the void. His sharp, complete, yet succinct analysis of these models’ shortcomings is a stepping stone for macroeconomists who want to move on. Macroeconomic policy has been captive to “evil twins,” DSGE and computable general equilibrium (CGE) models, inheriting their disconnect from some of reality’s most pressing problems. The latest example is the Italian government’s plan to recover from the COVID-19 crisis, which showcases these models’ inability to account for demand-driven growth. Better models exist but require more investment to break the blockade of current expert opinion.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.