[The primary purpose of this paper is to compare the predictive accuracy of four models: (1) Sargent's classical macroeconometric model, (2) Sim's six-equation unconstrained vector autoregression model, (3) a "naive" eighth-order autoregressive model, and (4) my model. A recent method that I have proposed for estimating the predictive accuracy of a model, which takes account of the four main sources of uncertainty of a forecast, is used for the comparisons. The results indicate that Sargent's and Sims's models are the same as or less accurate than the naive model, depending on the variable, and that my model is more accurate for real GNP, the GNP deflator, and the unemployment rate and less accurate for the money supply and the wage rate than the naive model. A secondary purpose of the paper is to point out some econometric mistakes that Sargent made in his empirical work and to propose an alternative technique that can be used to estimate a rational expectations model like his.]

This article provides quantitative estimates from an econometric model of the output, price, interest rate, and exchange rate linkages among a number of countries. The linkages are examined by changing various policy variables and observing the resulting changes in the endogenous variable. The model is also used to estimate what is called the "exchanging rate effect" on inflation. One of the ways in which monetary and fiscal policies may affect a country's inflation rate is by first influencing its exchange rate, which in turn influences import prices, which in turn influence domestic prices. The model allows this exchange rate effect on inflation to be estimated.

In this paper a model is developed that explains the allocation of an individual's time among work and two types of leisure activities: time spent with spouse, and time spent with paramour. Data from two recent magazine surveys are available that can be used to test the predictions of the model regarding the determinants of time spent with paramour. The results of estimating the equation explaining time spent with paramour, by the Tobit estimator, are generally supportive of the model, although more evidence is needed before any definitive conclusions can be drawn. The model can also be applied to the allocation of time among other types of leisure activities.

The effects of the changing U.S. age distribution on various macroeconomic equations are examined in this paper. The equations include consumption, housing-investment, money-demand, and labor-force-participation equations. There seems to be enough variance in the age-distribution data to allow reasonably precise estimates of the effects of the age distribution on the macro variables.

The information contained in one model's forecast compared to that in another can be assessed from a regression of actual values on predicted values from the two models. We do this for forecasts of real GNP growth rates for different pairs of models. The models include a structural model (the Fair (1976) model), various versions of the vector autoregressive (VAR) model, and various versions of a model we call the "autoregressive components" (AC) model. Our procedure requires that forecasts make no use of future information, and we have been careful to try to insure this, including using the version of the Fair model that existed in 1976, the beginning of our test period.