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On the role of small models in macrodynamics

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  • Turnovsky, Stephen J.

Abstract

This paper focuses on the role of small models in macrodynamics. It discusses the insights that I believe these models offer and the extent to which they can address some of the complex issues, such as heterogeneity and interactions among agents that are receiving increasing attention in the literature. I comment on what I view to be the most productive role for numerical simulations, and finally offer some brief comments in defense of the state of modern macroeconomic theory in light of the criticism it has received as a result of the recent financial crisis.

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  • Turnovsky, Stephen J., 2011. "On the role of small models in macrodynamics," Journal of Economic Dynamics and Control, Elsevier, vol. 35(9), pages 1605-1613, September.
    • Handle: RePEc:eee:dyncon:v:35:y:2011:i:9:p:1605-1613
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    Small models Macrodynamics;

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