Weekly Thought Evaluations (WTEs) # 4

Weekly Thought Evaluations (WTEs).  Each week, the instructor will ask for a 3-5 page paper on the current week’s topic. The content of the paper will respond to the topic by including a summary of the relevant chapter and/or readings and an application of that chapter’s material to the topic.

WTE 4

Please prepare a 3-5 page paper in response to this narrative and upload as indicated.

The physiocrats created the first “model” of economic life.  Describe its structure and its dynamics (i.e., how does the model “work”). Now compare and contrast this model with modern macroeconometric models (e.g., the Klein model, the DRI model, etc.). Include in your essay the structure of models, the estimation of models, the dynamics of models, and forecasting of models. Explain why there are differences between the physiocratic and modern approaches to models, focusing on their different purposes.