This paper outlines a theory of what might be going wrong in the monetary SVAR (structural vector autoregression) literature and provides supporting empirical evidence. The theory is that macroeconomists may be attempting to identify structural forms that do not exist, given the true...

Given one parameter restriction, an output-stabilization rule for the provision of public services turns a Kaldor–Kalecki–Steindl growth model with unstable, catastrophe-prone dynamics into one with a stable limit cycle. In contrast, using a budget-balancing rule produces a saddle point,...