What question did this study set out to answer?

To evaluate the validity of standard identification restrictions in large-scale macroeconomic models and propose a non-standard econometric alternative for empirical analysis.

January 1, 1980Econometrica

Macroeconomics and Reality

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To evaluate the validity of standard identification restrictions in large-scale macroeconomic models and propose a non-standard econometric alternative for empirical analysis.
Critiqued the theoretical foundations and statistical validity of structural identification assumptions used in existing large-scale macroeconomic models.
Estimated an alternative six-variable dynamic system without imposing conventional overidentifying restrictions.
Claims for structural identification in existing large-scale macroeconomic models are invalid and cannot be justified theoretically or empirically.
Unrestricted dynamic systems provide a practical econometric framework for business cycle forecasting and policy analysis without relying on incredible restrictions.

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Implication

Econometric analysis demonstrates that standard macroeconomic identification restrictions are invalid, suggesting alternative dynamic system approaches for empirical modeling.

Cite This Study

Christopher A. Sims (1980) studied this question.

synapsesocial.com/papers/69d844528cb8f39931ae2b50 https://doi.org/10.2307/1912017

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Implication

Econometric analysis demonstrates that standard macroeconomic identification restrictions are invalid, suggesting alternative dynamic system approaches for empirical modeling.

Macroeconomics and Reality

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Discussion

Implication

Cite This Study

Macroeconomics and Reality

Key Points

Discussion

Implication

Cite This Study

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