The Lucas Critique of Econometric Policy Evaluation argues that the parameters of econometric models are subject to theoretical cross-equation restrictions which follow from the fact that the endogenous variables of the models are chosen optimally by forward-looking agents. In this paper I argue that these facts alone are insufficient to generate such restrictions. I present an example of a mod...

strength and duration, that have, so far, characterized economic activity. January 31, 2001: Preliminary real GDP growth for the fourth quarter is barely above 1 percent, more than 4 percentage points below what is was only two quarters before and about 7 percentage points below its level in the third quarter of 1999. Much of the press, and some forecasters, predict that the first quarter of 20...

Work zones are critical parts of the transportation infrastructure renewal process consisting of rehabilitation of roadways, maintenance, and utility work. Given the specific nature of a work zone (complex arrangements of traffic control devices and signs, narrow lanes, duration) a number of crashes occur with varying severities involving different vehicle sizes. In this paper we attempt to inv...

A Model as a Simplification of Reality There is no single model of an economic system. In general, a model is a simplified approximation of reality, and there must surely be many such approximations. Therefore, we have large and small models, real and nominal models, sector and aggregative models, dynamic and static models, long-and short-run models, and so on. The model being used at any one t...

This work aims to study and explain the business cycle correlations of the Japanese production network. We consider the supplier-customer network, which is a directed network representing the trading links between Japanese firms (links from suppliers to customers). The community structure of this network is determined by applying the Infomap algorithm. Each community is defined by its GDP and i...

This chapter is concerned with modeling the economic linkages among countries. Although there are by now a number of multicountry macroeconometric models in existence, it seems safe to say with respect to the treatment of capital Rows and exchange rates that econometric work has not kept pace with theoretical developments. Since Mundell’s pioneering theoretical work (1968) in the 1960s. the pot...

This paper characterizes the dynamic effects of shocks in government spending and taxes on economic activity in the United States in the postwar period. It does so by using a structural VAR approach that relies on institutional information about the tax and transfer systems and the timing of tax collections to identify the automatic response of taxes and spending to activity, and, by implicatio...