Inside a Modern Macroeconometric Model: A Guide to the Murphy Model (Lecture Notes in Economics and Mathematical Systems)

This book presents a detailed account of how a state-of-the-art macro model is built, and how it works. Throughout the emphasis is on providing the reader with a hands-on appreciation of the underlying economics, and its practical implementation. The model described, MM, is a leading example of the newer breed of macro models that: (a) have strong micro foundations; (b) incorporate rational expectations in financial markets; (c) converge over simulated time to an interpretable balanced growth path; and (d) draw on the strenghts of many different traditions in economics. This account will be particularly useful to practitioners of policy economics and forecasting, as well as to upper-level undergraduate and graduate students in economics and econometrics.