Boston Fed paper lauds survey data over rational assumptions for macro models

boston-federal-reserve

Replacing rational expectations with survey data improves the performance of macroeconomic models, according to a working paper published by the Federal Reserve Bank of Boston on December 28.

The paper's author, Jeff Fuhrer, says real expectations sourced from economic surveys – on inflation, unemployment and short-term interest rates – benefit dynamic stochastic general equilibrium (DSGE) models "along a variety of dimensions".

Importantly, it eliminates the need to include ad hoc features such

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: