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Thursday, June 4, 2009

Macroeconomists' dirty secret

How bout this. Interesting how Levitt talks about a dearth of macro data for testing current macro models. But here's a dirty little secret: most current macro models cannot be tested empirically because they are founded on Walrasian equilibrium concepts, which, at least as of the time I was in grad school just a few years ago, could not be identified econometrically.

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