The last twenty years have witnessed tremendous advances in the mathematical, statistical, and computational tools available to applied macroecomists. This rapidly evolving field has redefined how researchers test models and validate theories. Yet until w there has been textbook that unites the latest methods and bridges the divide between theoretical and applied work. Fabio Cava brings together dynamic equilibrium theory, data analysis, and advanced ecometric and computational methods to provide the first comprehensive set of techniques for use by academic ecomists as well as professional macroecomists in banking and finance, industry, and government. This graduate-level textbook is for readers kwledgeable in modern macroecomic theory, ecometrics, and computational programming using RATS, MATLAB, or Gauss. Inevitably a modern treatment of such a complex topic requires a quantitative perspective, a solid dynamic theory background, and the development of empirical and numerical methods--which is where Cava's book differs from typical graduate textbooks in macroecomics and ecometrics. Rather than list a series of estimators and their properties, Cava starts from a class of DSGE models, finds an approximate linear representation for the decision rules, and describes methods needed to estimate their parameters, examining their fit to the data. The book is complete with numerous examples and exercises. Today's ecomic analysts need a strong foundation in both theory and application. Methods for Applied Macroecomic Research offers the essential tools for the next generation of macroecomists.
Fabio Canova is ICREA Research Professor at the University of Pompeu Fabra in Barcelona and Fellow of the Centre for Economic Policy Research in London.