Structural VAR, Marma and Open Economy Models
Columbia University Econ Dept Discussion Paper No. 9798-07
28 Pages Posted: 28 Oct 1998
Date Written: November 1997
The objective of this paper is to examine the recent literature on the standard open economy macro paradigm. Since there are many aspects to this literature, we concentrate on issues regarding the nature of restrictions imposed in order to gain identification, the general problem of identification in the context of the standard structural VAR (SVAR) or structural MARMA (SMARMA) model employed for that purpose, the question of whether "forward" looking (rational) expectations (FLE) are more in accord with empirical evidence than the standard "backward" looking (rational) expectational (BLE) schemes and, finally, whether the results one obtains are invariant to the choice of model specification as SVAR or SMARMA.
JEL Classification: C4
Suggested Citation: Suggested Citation