The role of simulation methods in macroeconomics

Novales Cinca, Alfonso

The role of simulation methods in macroeconomics

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Publication date

2002

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Novales Cinca, Alfonso

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Instituto Complutense de Análisis Económico. Universidad Complutense de Madrid

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https://hdl.handle.net/20.500.14352/64519

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Abstract

After reviewing the reasons to use solution methods in macroeconomics, this survey paper discusses diferent aspects relative to a rigorous use of the numerical output of such methods. Special attention is paid to suggestions that have been made to incorporate parameter uncertainty. Finally, the need to test for usually maintained assumptions, such as rationality of expectations, is emphasized.