Video Of Day

Breaking News

Macro Handbook 2

Last calendar week I attended the commencement one-half of the conference on the Handbook of Macroeconomics Volume 2, organized past times John Taylor too Harald Uhlig, held at Hoover. The conference program too most of the papers are here.  The mo one-half volition live on inwards Chicago Apr 23-25, program here

Overall, this Handbook is shaping upward equally a really useful resource.  Really adept summary too review papers are a natural agency inwards to long literatures. Bad summary too review papers are long too boring. The conference produced the commencement kind. Most of the papers are oil commencement drafts, thence brand a banking concern complaint to come upward dorsum when they're finished. H5N1 few highlights (with apologies to authors I've left out; I can't review them all here.)


Republic of Chad Jones' "The Facts of Economic Growth" is a tremendous introduction to a complex field, nicely mixing facts too ideas. If you lot concluding left increment theory amongst a persuasion that ratios are stable too nosotros but climb upward amongst TFP, this newspaper volition alter that view. Equipment is getting cheaper. Factor shares are moving. Human uppercase is trending up, along amongst its price. R&D spending too occupation portion tendency up. Misallocation has first-order negative effects on productivity, a finding from increment theory that macro should pay to a greater extent than attending to. Agriculture is declining, wellness assist expanding. Fertility is declining. Inequality, .. yes, that too. Sometimes countries converge, sometimes they diverge.
"... 1 time countries teach on the “growth escalator,” adept things tend to locomote on too they grow chop-chop to displace closer to the frontier. Where they terminate upward depends, equally nosotros volition discuss, on the extent to which their institutions improve."
Jesús Fernández-Villaverde, Juan Rubio-Ramirez too Frank Schorfheide's  "Solution too Estimation Methods for DSGE Models" is encyclopedic, approaching a mass inwards itself. The technique of solving models, curiously banished from papers these days, is a nighttime art. There are lots of techniques. Which reach you lot role when?  think this volition live on a really useful "cookbook" for modelers, which is but the sort of thing handbooks are adept for. We had a lively give-and-take on which techniques are best for which kinds of models. How many shocks, how many dry reason variables, how of import are nonlinearities all matter. I made the green complaints almost identification, too that perchance models nosotros know are imitation (one shock, many series) mightiness non live on correct for formal dark box estimation methods. Intuitive connection to robust facts inwards the information may live on to a greater extent than of import than statistical efficiency when the model is a quantitative parable.

Monica Piazzesi Martin Schneider's "Housing too Macroeconomics" -- no newspaper yet, alas, but await for it --  is a really prissy introduction to the sort of explicit modeling interacted amongst information that they've been doing.

Valerie Ramey's  Macroeconomic Shocks too Their Propagation took upward the electrical current dry reason of vector autoregressions, daze identification too thence forth. H5N1 cracking integration of a long literature. Where are we?  Both Valeire too Arvind Krishnamurthy discussing showed lots of graphs amongst varying signs of the effects of monetary policy. Despite threescore years (since Milton Friedman regressed output on money, amongst high points from Tobin too Solow early on 1960s; St. Louis Fed belatedly 1960s;  Sims too Granger belatedly 1970s;  Christiano-Eichenbaum-Evans 1999; Romer too Romer to a greater extent than recently), we're however at it.  Most of the give-and-take pointed out how much dubiousness at that spot however is. I opined that most of the "uncertainty" was almost how much you lot convey to torture estimates to avoid the determination that involvement charge per unit of measurement rises heighten output too inflation.

Gary Hansen too Lee Ohanian comprehend "Neoclassical Theories" past times example, integrating 3 recent models they convey worked on, roofing how "neoclassical" theories tin give notice delineate of piece of work organisation human relationship for the Great Depression, the WWII boom, too the surprisingly large postwar fluctuations at frequencies lower than measure delineate of piece of work organisation cycles. My discussion complained almost the habit of dissimilar models for dissimilar facts, too exogenous TFP shocks. I suggests that it's fourth dimension to persuasion delineate of piece of work organisation wheel TFP movements equally to a greater extent than than but scientific innovation identified past times residual, but rather to include too independently mensurate all the "wedges" that policy is inducing betwixt project design too adoption. Among other points.

Jim Stock too Mark Watson, "Factor Models for Macroeconomics" (No paper, alas, but await for it) is shaping upward to live on 1 of those really useful "how to" papers that handbooks tin give notice provide. Lots of insight inwards how to role the Stock-Watson methodology inwards many contexts, all inwards 1 place, too (to jurist past times Mark's presentation) ultra-clear too accessible.

Bob Hall shut rigid amongst "Macroeconomics of Persistent Slumps," the latest inwards Bob's thinking on this bailiwick (other highlights are his AEA Presidential Speech too Macro Annual paper.) An interesting sidelight, Bob also innovated a novel solution methodology. Write the shocks equally multinomials, too then but solve commencement guild weather on the next tree. It's amazingly fast. And non inwards the Fernández-Villaverde,  Rubio-Ramirez, Schorfheide cookbook.

Again, the other papers were cracking too. And the mo circular promises to equal if non ameliorate the first.

No comments