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Media type:
E-Article
Title:
A Simulation of the United States Economy in Recession
Contributor:
Duesenberry, James S.;
Eckstein, Otto;
Fromm, Gary
Published:
The Econometric Society, 1960
Published in:
Econometrica, 28 (1960) 4, Seite 749-809
Language:
English
ISSN:
0012-9682;
1468-0262
Origination:
Footnote:
Description:
To test the vulnerability of the U.S. economy to depression, an econometric model has been built, which seeks to put the automatic stabilizers in a realistic macroeconomic setting. This model makes it possible to estimate the impact of alternative time patterns of decline of fixed investment and government purchases on the quarterly national income accounts, particularly on GNP. The model is also used to discover the implications of new potential policies, particularly improvements in the automatic stabilizers. A simulation approach is employed to study the effects of the error terms in the equations, both to see the forecasting potential of a model of this sort and to test whether errors lead to cumulative deviations from the expected path of the system.