The primary aim of the paper is to place current methodological discussions in macroeconometric modeling contrasting the 'theory first' versus the 'data first' perspectives in the context of a broader methodological framework with a view to constructively appraise them. In particular, the paper...

We develop a tractable macroeconomic model with employment risk and labor market search in order evaluate the effects of labor market reform on unemployment, growth, and welfare. The model has a large number of risk-averse households who can invest in risk-free physical capital and risky human...

Zur Konjunkturprognose werden oft auch ökonometrische Modelle eingesetzt. Schärft die Anwendung EDV-gestützter ökonometrischer Verfahren den Blick in die Zukunft oder führt die vermeintliche „Exaktheit" solcher Modelle eher zu einer Verengung des Blickwinkels? Welche Probleme ergeben sich...

This paper investigates the accuracy and heterogeneity of output growth and inflation forecasts during the current and the four preceding NBER-dated U.S. recessions. We generate forecasts from six different models of the U.S. economy and compare them to professional forecasts from the Federal...

The last years have witnessed a sharp increase of interest in monetary policy rules (see Taylor [1999]). This normative branch of monetary policy tries to evaluate the performance of alternative monetary policy rules in terms of associated monetary policy outcomes. Nevertheless this exercise is...

Within a decision-making group, such as the monetary-policy committee of a central bank,group members often hold differing views about the future of key economic variables. Such differences of opinion can be thought of as reflecting differing sets of judgement. This paper suggests modelling each...

This document gives a detailed account of the current version of the Hungarian Quarterly Projection Model (NEM). It describes the main building blocks, presents the forecast performance of the model and, finally, it illustrates the responses to the most important shocks the Hungarian economy may...

We use the method of indirect inference to test a full open economy model of the UK that has been in forecasting use for three decades. The test establishes, using a Wald statistic, whether the parameters of a time-series representation estimated on the actual data lie within some confidence...