Models and Reality: Teaching Macroeconomics in the Nineties

Authors

  • Jorge A. Quiroz ILADES-Georgetown University
  • Francisco A. Bernasconi ILADES-Georgetown University
  • Rómulo A. Chumacero ILADES-Georgetown University
  • César L. Revoredo ILADES-Georgetown University

Keywords:

macroeconomic modeling, deep parameters, stochastic dynamic models, calibration, Latin America, real business cycles

Abstract

This paper provides a basic methodological guide for formulating, solving, and calibrating simple nonlinear stochastic dynamic macro models. The paper illustrates the usefulness of the various techniques by means of different numerical exercises applied to the economies of Bolivia, Chile, and Peru.

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References

Arrau, P. (1990). Un modelo macroeconómico intertemporal de dinero y consumo para Chile. Colección Estudios CIEPLAN, (28).

Duffie, D., & Singleton, K. J. (1989). Simulated moments estimation of Markov models of asset prices [Manuscrito]. Graduate School of Business, Stanford University.

Hansen, L., & Sargent, T. (1980). Formulating and estimating dynamic linear rational expectations models. Journal of Economic Dynamics and Control, 2, 7–46. https://doi.org/10.1016/0165-1889(80)90012-3

Kydland, F., & Prescott, E. (1982). Time to build and aggregate fluctuations. Econometrica, 50(6), 1345–1370. https://doi.org/10.2307/1913386

McGrattan, E. (1990). Solving the stochastic growth model by linear-quadratic approximation. Journal of Business & Economic Statistics, 8(1), 41–43.

McGrattan, E. (1991). Government policy and aggregate fluctuations. Revista de Análisis Económico, 6(2).

Quiroz, J. (1991). Las regularidades empíricas del tipo de cambio real en Chile: Un enfoque real de ciclos económicos. Revista de Análisis Económico, 6(2).

Sargent, T. (1981). The observational equivalence of natural and unnatural rate theories of macroeconomics. In R. Lucas & T. Sargent (Eds.), Rational expectations and econometric practice (Vol. 2). University of Minnesota Press.

Sargent, T. (1987). Dynamic macroeconomic theory. Harvard University Press.

Sims, C. (1980). Macroeconomics and reality. Econometrica, 48(1), 1–48. https://doi.org/10.2307/1912017

Taylor, J., & Uhlig, H. (1990). Solving nonlinear stochastic growth models: A comparison of alternative solution methods. Journal of Business & Economic Statistics, 8(1), 1–17. https://doi.org/10.1080/07350015.1990.10509766

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Published

1991-10-31

How to Cite

Quiroz, J. A., Bernasconi, F. A., Chumacero, R. A., & Revoredo, C. L. (1991). Models and Reality: Teaching Macroeconomics in the Nineties. Economic Analysis Review, 6(2), 79–103. Retrieved from https://www.rae-ear.org/index.php/rae/article/view/243

Issue

Vol. 6 No. 2 (1991)

Section

Articles

License

Copyright (c) 1991 Jorge A. Quiroz, Francisco A. Bernasconi, Rómulo A. Chumacero, César L. Revoredo

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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