The possibility of ideological bias in structural macroeconomic models

Gilles Saint-Paul

Research output: Contribution to journalArticle

Abstract

An ideologically biased expert faces trade-offs in model design. The perceived model must be autocoherent-its use by all agents delivers a self-confirming equilibrium. Policy may be influenced by manipulating the Keynesian multiplier or the Phillips curve parameters. Ideological bias may arise in a way that resembles well-known historical controversies. A larger reported Keynesian multiplier is favored by more left-wing economists, as is a flatter inflation output trade-off. Some combinations of parameters must be truthfully revealed, illustrating the tight link between parameter identification and the scope for bias that is implied by the autocoherence conditions.

Original languageEnglish (US)
Pages (from-to)216-241
Number of pages26
JournalAmerican Economic Journal: Macroeconomics
Volume10
Issue number1
DOIs
StatePublished - Jan 1 2018

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ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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