Chapter 15Facts and Artifacts: Calibration and the Empirical Assessment of Real-Business-Cycle Models
Oxford Economic Papers 47(1), March 1995, pp. 24-44
Department of Economics, University of California, Davis, California 95616-8578, USA
1. Whither quantitative macroeconomics?
THE RELATIONSHIP between theory and data has been, from the beginning, a central concern of the new-classical macroeconomics. This much is evident in the title of Robert E. Lucas’s and Thomas J. Sargent’s landmark edited volume, Rational Expectations and Econometric Practice (1981). With the advent of real-business-cycle models, many new classical economists have turned to calibration methods. The new classical macroeconomics is now divided between ...
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