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Models and Their Uses

Discussion Paper 11 | Published April 1, 1989

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Models and Their Uses


It is argued that economists ought to recognize that modeling in different styles will be appropriate for different purposes or different stages in the development of an area of economics. As an example, the paper displays simulations of a stochastic general equilibrium model which shed light on the interpretation of widely discussed small macroeconomic vector autoregressive models connecting monetary variables to output and prices.

Published In: American Journal of Agricultural Economics (Vol. 71, No. 2, May 1989, pp. 489-494)