Abstract
Developments in macro-econometrics have been evolving since the aftermath of the Second World War.[...]
Highlights
Such a research programme has attained a meaningful success as the methods of macro-econometrics have been used widely over about half a century to check the implications of economic theories, to model macroeconomic relationships, to forecast business cycles, and to help policymakers to make appropriate decisions
(early 1990s–2007) and suggested some limitations of the widely employed and dominant macro-econometric framework. One of these deficiencies was that current macroeconomic models have failed to predict this huge economic downturn, perhaps because they did not take into account indicators of contagion, systemic risk, and the financial cycle, or the inter-connectedness of asset markets, in particular housing, with the macro-economy
It seems that something was going wrong, and several new lines of research have pointed to the importance of measurement errors in macroeconomic and financial variables (Barnett 2012). It appears that monetary rules and macroeconomic models were misspecified, and the pre-crisis generation of dynamic stochastic general equilibrium (DSGE) models had ignored many features of the real world, which should have been incorporated in the structure and behavioral assumptions of these models
Summary
Such a research programme has attained a meaningful success as the methods of macro-econometrics have been used widely over about half a century to check the implications of economic theories, to model macroeconomic relationships, to forecast business cycles, and to help policymakers to make appropriate decisions. This Special Issue aims to focus on new developments in macroeconomic modeling and macro-econometric techniques that have been introduced to extend the recent framework of macro-econometrics, itself challenged along various dimensions after the experience with the global financial crisis.
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