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This book explores the US economy from 1960 to 2010 using a more Keynsian, Cowles model approach, which the author argues has substantial advantages over the vector autoregression (VAR) and dynamic stochastic general equilibrium (DSGE) models used almost exclusively today. Heim presents a robust argument in favor of the Cowles model as an answer to the pressing, unresolved methodological question of how to accurately model the macroeconomy so that policymakers can reliably use these models to assist their decision making. Thirty-eight behavioral equations, describing determinants of variables such as consumption, taxes, and government spending, are connected by eighteen identities to construct a comprehensive model of the real US economy that Heim then tests across four different time periods to ensure that results are consistent. This comprehensive demonstration of the value of a long-ignored model provides overwhelming evidence that the more Keynesian (Cowles) structural models outperform VAR and DSGE, and therefore should be the models of choice in future macroeconomic studies. .

Econometrics. --- Macroeconomics. --- Regional economics. --- Spatial economics. --- Economics. --- Macroeconomics/Monetary Economics//Financial Economics. --- Regional/Spatial Science. --- United States --- Economic conditions. --- Economics --- Economics, Mathematical --- Statistics --- Regional planning --- Regionalism --- Space in economics --- Spatial economics --- Regional economics

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Monetary policy --- Fiscal policy --- United States --- Economic conditions.

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This book explores the US economy from 1960 to 2010 using a more Keynsian, Cowles model approach, which the author argues has substantial advantages over the vector autoregression (VAR) and dynamic stochastic general equilibrium (DSGE) models used almost exclusively today. Heim presents a robust argument in favor of the Cowles model as an answer to the pressing, unresolved methodological question of how to accurately model the macroeconomy so that policymakers can reliably use these models to assist their decision making. Thirty-eight behavioral equations, describing determinants of variables such as consumption, taxes, and government spending, are connected by eighteen identities to construct a comprehensive model of the real US economy that Heim then tests across four different time periods to ensure that results are consistent. This comprehensive demonstration of the value of a long-ignored model provides overwhelming evidence that the more Keynesian (Cowles) structural models outperform VAR and DSGE, and therefore should be the models of choice in future macroeconomic studies. .

Macroeconomics --- Quantitative methods (economics) --- Economics --- Environmental planning --- Economic geography --- ruimtelijke ordening --- economie --- sociale economie --- macro-economie --- econometrie

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"Using sophisticated econometric techniques, Heim is able to achieve a dual result: to show that the Keynesian approach to economic stabilization is theoretically valid; but that its practical application in the past has proved quantitatively problematic. It may well be that he is vindicated by the unprecedented measures applied in the last two downturns." -Paul Hohenberg, 2007 President, Economic History Association "Keynesian macro policy has been thought to fail because of crowding out... this book shows that Keynesian macro policy was not the failure, it was the accommodating monetary policies that failed;...Furthermore, it appears that the use of investment banks, rather than commercial and savings and loans banks, significantly obstructed the effectiveness of the accommodative policies." -John Polimeni, Associate Professor of Economics, Albany College of Pharmacy. "Why Fiscal Stimulus Fails (Vol. 1) succeeds in its quest to establish the relationship between government deficits, crowding out, and monetary policy. The treatise benefits further from Heim's requirements that economic models be replicable... the thoroughness and clarity of Heim's presentation makes the work accessible to anyone."-Robert Jones, Rensselaer Polytechnic Institute This book offers a series of statistical tests to determine if the "crowd out" problem, known to hinder the effectiveness of Keynesian economic stimulus programs, can be overcome by monetary programs. It concludes there are programs that can do this, specifically "accommodative monetary policy." They were not used to any great extent prior to the Quantitative Easing program in 2008, causing the failure of many fiscal stimulus programs through no fault of their own. The book includes exhaustive statistical tests to prove this point. There is also a policy analysis section of the book. It examines how effectively the Federal Reserve's anti-crowd out programs have actually worked, to the extent they were undertaken at all. It finds statistical evidence that using commercial and savings banks instead of investment banks when implementing accommodating monetary policy would have markedly improved their effectiveness. This volume, with its companion volume Why Fiscal Stimulus Programs Fail, Volume 2: Statistical Tests Comparing Monetary Policy to Growth, provides 1000 separate statistical tests on the US economy to prove these assertions.

Macroeconomics --- Quantitative methods (economics) --- Public finance --- macro-economie --- sociale interventies --- overheidsfinanciën --- econometrie

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Macroeconomics --- Quantitative methods (economics) --- Public finance --- macro-economie --- sociale interventies --- overheidsfinanciën --- econometrie