On Model-Consistent Expectations in Macroeconomics

Abstract

English: The practice of ascribing to agents expectations compatible with the model currently proposed by the analyst has been a widespread feature in Macroeconomics. However, that is a problematic assumption when used to depict anticipations constructed in the past since it would imply attributing to agents the use of a model that the economist had not yet built, and possibly not yet thought about. Thus, model- consistency is an ambiguous notion. In this paper we present a preliminary exploration of the application of the alternative forms of model-consistency in a very standard setup, using two related analytical constructs of different generations for U.S. data for the period 1959-2015.