IDEAS home Printed from https://ideas.repec.org/a/oup/oxecpp/v40y1988i1p132-49.html
   My bibliography  Save this article

The Encompassing Implications of Feedback versus Feedforward Mechanisms in Econometrics

Author

Listed:
  • Hendry, David F

Abstract

If expectations are an important ingredient of economic decisions, when expectations alter feedback, models should manifest parameter change. This aspect of the "Lucas critique" therefore has implications for feedforward models when expectations processes change but conditional models do not. Both invariance and encompassing attributes of each type of model are investigated to demonstrate that the Lucas critique is refutable, as well as confirmable, even with incomplete information about how agents form expectations. The approach is applied to the transactions demand for money in the United Kingdom and corroborates earlier work by the author by refuting a claimed expectations interpretation. Copyright 1988 by Royal Economic Society.

Suggested Citation

  • Hendry, David F, 1988. "The Encompassing Implications of Feedback versus Feedforward Mechanisms in Econometrics," Oxford Economic Papers, Oxford University Press, vol. 40(1), pages 132-149, March.
    • Handle: RePEc:oup:oxecpp:v:40:y:1988:i:1:p:132-49
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0030-7653%28198803%292%3A40%3A1%3C132%3ATEIOFV%3E2.0.CO%3B2-K&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:40:y:1988:i:1:p:132-49. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/oep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.