Wednesday, May 29, 2013

Searching for the GE of My Thoughts on DSGE

Noah Smith has an interesting post on the encouraging further developments of the DSGE model which got me to thinking about my last post: I feel as if I come off strongly in favor of DSGE models. While I have a certain fondness for DSGE models (it was the first macroeconomic model I was able to modify and simulate to my own whims; and it's still influential in economic circles) I am completely aware of their limitations. What I do feel, however, is that Mark Buchanan did not address these limitations and, instead, attacked the model from a more populist viewpoint that adds little to the conversation of economic modeling.

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