Modelling a Complex World: Improving Macro-Models

What is it about?

Explains why a particular macroeconomic model is useful for analysing policy. Gives real-world examples.

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Why is it important?

Policymakers are interested in 'what if' questions to assess the merits of alternative policies. The only way to do this is by using a model of the economy. But what sort of model? And what features are important to capture? This paper addresses these issues.