The Encompassing Implications of Feedback versus Feedforward Mechanisms in Econometrics.
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 n...
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| Format: | Journal article |
| Language: | English |
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1988
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| _version_ | 1797053480954757120 |
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| author | Hendry, D |
| author_facet | Hendry, D |
| author_sort | Hendry, D |
| collection | OXFORD |
| description | 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. |
| first_indexed | 2024-03-06T18:44:21Z |
| format | Journal article |
| id | oxford-uuid:0dffcee2-167b-43aa-aea6-f009bbccd193 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T18:44:21Z |
| publishDate | 1988 |
| record_format | dspace |
| spelling | oxford-uuid:0dffcee2-167b-43aa-aea6-f009bbccd1932022-03-26T09:43:28ZThe Encompassing Implications of Feedback versus Feedforward Mechanisms in Econometrics.Journal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:0dffcee2-167b-43aa-aea6-f009bbccd193EnglishDepartment of Economics - ePrints1988Hendry, DIf 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. |
| spellingShingle | Hendry, D The Encompassing Implications of Feedback versus Feedforward Mechanisms in Econometrics. |
| title | The Encompassing Implications of Feedback versus Feedforward Mechanisms in Econometrics. |
| title_full | The Encompassing Implications of Feedback versus Feedforward Mechanisms in Econometrics. |
| title_fullStr | The Encompassing Implications of Feedback versus Feedforward Mechanisms in Econometrics. |
| title_full_unstemmed | The Encompassing Implications of Feedback versus Feedforward Mechanisms in Econometrics. |
| title_short | The Encompassing Implications of Feedback versus Feedforward Mechanisms in Econometrics. |
| title_sort | encompassing implications of feedback versus feedforward mechanisms in econometrics |
| work_keys_str_mv | AT hendryd theencompassingimplicationsoffeedbackversusfeedforwardmechanismsineconometrics AT hendryd encompassingimplicationsoffeedbackversusfeedforwardmechanismsineconometrics |