This chapter relates differences in selected multipliers of two econometric models—the DRI/McGraw-Hill (DRI) and the Bureau of Economic Analysis (BEA) models—to underlying structural differences. Because of the large size and the complexity of the models, this cannot be accomplished in anything like an exhaustive sense. Rather, the chapter tries to identify the major sources of differences by using fairly powerful analytical shortcuts. The DRI and BEA models can both be characterized as “mainstream” models in that they are augmented Keynesian systems; thus, they do not display the most extreme intermodel differences in fiscal and monetary policy multipliers. However, differences are substantial and stimulate investigation of their causes. Although the restriction of this in-depth comparison to two models was a practical necessity, it has heuristic value by at least indicating where sensitive modeling decisions may occur in other models.
Keywords: econometric models; DRI/McGraw-Hill; Economic Analysis; structural differences; Keynesian systems; fiscal policy; monetary policy
Chapter. 15660 words. Illustrated.
Subjects: Econometrics and Mathematical Economics
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