Economic Modeling: Why the Standard Model Survives Bad Performance

Authors

Steven Gjerstad, Chapman UniversityFollow
Vernon Smith, Chapman UniversityFollow

Document Type

Article

Publication Date

Spring 2016

Abstract

Many forecasters have relied on a model that has yielded overly optimistic predictions for the economy’s recovery from the Great Recession. The standard model has performed poorly because it is ill-suited for dealing with housing cycles, especially those that include speculation-driven housing purchases, unusual levels of mortgage credit, and large international capital flows.

Comments

This article was originally published in The Independent Review, volume 20, issue 4, in 2016.

Recommended Citation

Gjerstad, S. D., & Smith, V. L. (2016). Economic modeling why the standard model survives bad performance. The Independent Review, 20(4), 627-631.

Copyright

The Independent Review