According to retrospective voting a bad economy hurts the incumbent party and vice versa. According to risk-aversion voting a bad economy favors the Democrats over the Republicans and vice versa. This paper provides a test of both theories and rejects risk-aversion voting

A computationally feasible method for the full information maximum likelihood estimation of models with rational expectations is described in this paper. The stochastic simulation of such models is also described. The methods discussed in this paper should open the way for many more tests of the...

This chapter discusses computational methods for the estimation and analysis of macroeconometric models. The chapter focuses on methods that, while possibly computationally routine, are not trivial. Most of the methods discussed are methods for complete models. The results reported in Fair and...

The methods for evaluating the predictive accuracy of econometric models are discussed in this chapter. The use of these methods should allow to decide upon the model that best approximates the true structure of the economy and how much confidence to place on the predictions from a given model....

Applying a probabilistic causal approach, we define a class of time series causal models (TSCM) based on stationary Bayesian networks. A TSCM can be seen as a structural VAR identified by the causal relations among the variables. We classify TSCMs into observationally equivalent classes by...

This paper uses a structurally estimated macroeconometric model, denoted the MC model, to evaluate inflation targeting in the United States. Various interest rate rules are tried with differing weights on inflation and output, and various optimal control problems are solved using differing...

This paper uses a structural multi-country macroeconometric model to estimate the size of the decrease in transfer payments (or tax expenditures) needed to stabilize the U.S. government debt/GDP ratio. It takes into account endogenous effects of changes in fiscal policy on the economy and in...

In January 2012 the Fed began reporting ranges of its economic forecasts. The ranges, however, measure differences of opinion, not variances of economic forecasts. This paper discusses what the Fed could report in a world in which it used a single macroeconometric model to make its forecasts and...

There have been a number of recent papers arguing that there has been considerable convergence in macro research and to the good. This paper considers the question whether what has been converged to is good. Has progress been made in understanding how the macro economy works?

This paper uses a multicountry macroeconometric model to analyze possible macroeconomic consequences of large future U.S. federal government deficits. The analysis has the advantage of accounting for the endogeneity of the deficit. In the baseline run, which assumes no large tax increases or...