Discussion Paper

No. 2008-25 | June 24, 2008
The ‘Pre-Eminence of Theory’ versus the ‘General-to-Specific’ Cointegrated VAR Perspectives in Macro-Econometric Modeling

Abstract

The primary aim of the paper is to place current methodological discussions on empirical modeling contrasting the ‘theory first’ versus the ‘data first’ perspectives in the context of a broader methodological framework with a view to constructively appraise them. In particular, the paper focuses on Colander’s argument in his paper “Economists, Incentives, Judgement and Empirical Work” relating to the two different perspectives in Europe and the US that are currently dominating empirical macro-econometric modeling and delves deeper into their methodological/philosophical foundations. It is argued that the key to establishing a constructive dialogue between them is provided by a better understanding of the role of data in modern statistical inference, and how that relates to the centuries old issue of the realisticness of economic theories.


Paper submitted to the special issue “Using Econometrics for Assessing Economic Models” edited by Katarina Juselius.

JEL Classification

B4 C1 C3

Cite As

Aris Spanos (2008). The ‘Pre-Eminence of Theory’ versus the ‘General-to-Specific’ Cointegrated VAR Perspectives in Macro-Econometric Modeling. Economics Discussion Papers, No 2008-25, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2008-25

Assessment



Comments and Questions


Anonymous - Referee Report
March 04, 2009 - 14:16

see attached file