Bayesian modeling of economies and data requirements (2000)

doi:10.1017/CBO9780511493171.025

24 - Bayesian modeling of economies and data requirements (2000)

Published online by Cambridge University Press: 24 October 2009

Arnold Zellner and

Bin Chen

Edited by

Arnold Zellner and

Franz C. Palm

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Arnold Zellner: Affiliation:
Professor, Emeritus of Economics and Statistics, Graduate School of Business, University of Chicago, Chicago, IL
Bin Chen: Affiliation:
Chicago Partners, LLC, Chicago, IL
Arnold Zellner: Affiliation:
University of Chicago
Franz C. Palm: Affiliation:
Universiteit Maastricht, Netherlands

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Summary

Introduction

For many years, theoretical and empirical workers have tried to model national economies in order to (1) understand how they operate, (2) forecast future outcomes, and (3) evaluate alternative economic policies. While much progress has been made in the decades since Tinbergen's pioneering work [1940], it is the case that no generally accepted model has as yet appeared. On the theoretical side, there are monetary, neo-monetary, Keynesian, neo-Keynesian, real business cycle, generalized real business cycle, and other theoretical models (see, Belongia and Garfinkel 1992 for an excellent review of many of these models and Min 1992 for a description of a generalized real business cycle model). Some empirical testing of alternative models has appeared in the literature. However, in Fair (1992) and Zellner (1992) (invited contributions to a St. Louis Federal Reserve Bank conference on alternative macroeconomic models), it was concluded that there is a great need for additional empirical testing of alternative macroeconomic models and production of improved models.

Over the years many structural econometric and empirical statistical models have been constructed and used. These include large structural econometric models (e.g. the Tinbergen, Klein, Brookings–SSRC, Federal Reserve–MIT–PENN, OECD, Project Link, and other models). While progress has been made, there does not yet appear to be a structural model that performs satisfactorily in point and turning point forecasting.

Type: Chapter
Information: The Structural Econometric Time Series Analysis Approach , pp. 677 - 706

DOI: https://doi.org/10.1017/CBO9780511493171.025 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2004

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