Estimating How the Macroeconomy Works by Ray C. FairEstimating How the Macroeconomy Works by Ray C. Fair

Estimating How the Macroeconomy Works

byRay C. Fair

Hardcover | December 15, 2004

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Macroeconomics tries to describe and explain the economywide movement of prices, output, and unemployment. The field has been sharply divided among various schools, including Keynesian, monetarist, new classical, and others. It has also been split between theorists and empiricists. Ray Fair is a resolute empiricist, developing and refining methods for testing theories and models. The field cannot advance without the discipline of testing how well the models approximate the data. Using a multicountry econometric model, he examines several important questions, including what causes inflation, how monetary authorities behave and what are their stabilization limits, how large is the wealth effect on aggregate consumption, whether European monetary policy has been too restrictive, and how large are the stabilization costs to Europe of adopting the euro. He finds, among other things, little evidence for the rational expectations hypothesis and for the so-called non-accelerating inflation rate of unemployment (NAIRU) hypothesis. He also shows that the U.S. economy in the last half of the 1990s was not a "new age" economy.

Ray C. Fair is Professor of Economics, Yale University.
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Title:Estimating How the Macroeconomy WorksFormat:HardcoverDimensions:314 pagesPublished:December 15, 2004Publisher:HarvardLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0674015460

ISBN - 13:9780674015463

Reviews

Editorial Reviews

The Fair model stands out as carefully articulated, carefully estimated, and a precious reference for those of us who like to know how the consumption function, or the investment function looks like in the data.