The ordinary business of macroeconometric modelling: working on the Fed-MIT-Penn model, 1964-1974

Research output: Contribution to journalArticlepeer-review

Authors

Colleges, School and Institutes

External organisations

  • CNRS
  • Universite Cergy-Pontoise

Abstract

The FMP model exemplifies the Keynesian models later criticized by Lucas, Sargent and others as conceptually flawed. For economists in the 1960s such models were “big science”, posing organizational as well as theoretical and empirical problems. It was part of an even larger industry in which the messiness for which such models were later criticized was endorsed as providing enabling modelers to be guided by data and as offering the flexibility needed to undertake policy analysis and to analyze the consequences of events. Practices that critics considered fatal weaknesses, such as intercept adjustments or fudging, were what clients were what clients paid for as the macroeconometric modeling industry went private.

Details

Original languageEnglish
Pages (from-to)425-447
Number of pages23
JournalHistory of Political Economy
Volume51
Issue number3
Publication statusPublished - 18 Jun 2019

Keywords

  • Macroeconometrics, Modigliani, Ando, De Leeuw, Gramlich, Federal Reserve, Lucas critique, Modeling