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Comprehensive macro-model for the U.S. economy

Kitov, Ivan and Kitov, Oleg and Dolinskaya, Svetlana (2008): Comprehensive macro-model for the U.S. economy.

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Abstract

We present a comprehensive macroeconomic model for the U.S. There exist strict long-term relations between real GDP, price inflation, labor force participation, productivity, and unemployment. The evolution of real GDP depends only on exogenous demographic forces. Other macro-variables follow up the real GDP. The links between the variables have been valid during the last several decades. All relations were (successfully) tested for cointegration. Statistical estimates are also presented. The relationships allow a reliable prediction of the macroeconomic state at very large (more than 9 years) time horizons.

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