Working Paper: NBER ID: w29628
Authors: Philip J. Glandon; Kenneth Kuttner; Sandeep Mazumder; Caleb Stroup
Abstract: How is macroeconomic research conducted and what is it trying to accomplish? We explore these questions using information gleaned from 1,894 articles published in ten leading journals. We find that over the past 40 years there has been a growing emphasis on increasingly sophisticated quantitative theory, such as DSGE modeling, and papers employing these methods now account for the majority of articles in macro journals. The shift towards quantitative theory is mirrored by a decline in the use of econometric methods to test economic hypotheses. Econometric techniques borrowed from applied microeconomics have to a large extent displaced time series methods, and empirical papers increasingly rely on micro and proprietary data sources. Market imperfections are pervasive, and the amount of research involving financial frictions has increased significantly in the past ten years. The frequency with which non-macro JEL codes appear in macro articles indicates a great deal of overlap between macroeconomics and other fields.
Keywords: macroeconomic research; quantitative theory; DSGE modeling; financial frictions
JEL Codes: A11; A14; B22; B41; E00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| exogenous variation in variable X (C22) | causal effects on variable Y (C29) |
| increase in quantitative theory emphasis (C54) | decrease in traditional econometric techniques (C51) |
| shift towards sophisticated quantitative theory (C15) | shift in research paradigm (B41) |
| increase in modeling of financial frictions (G19) | implications for macroeconomic research (F41) |
| complexity of models (C52) | deeper engagement with theoretical frameworks (B52) |
| shift in research paradigm (B41) | ability to address macroeconomic issues (E60) |