Computing probabilities of theories where these probabilities vary over time with applications in macroeconomics (2009-2010)

Economists use models (that represent theories) to provide advice to policymakers. As the support for alternative models can change with changes in the economy, so should advice. Policymakers prefer advice that accounts for changes in the economic environment and that does not depend upon a single model. Recent work has developed methods that address one or the other of these needs, but not both. This project will use models that allow for the changing economic environment and develop i) a method of computing the changing empirical support for alternative models over time, ii) a method of providing policymakers with information that does not depend upon a single model and iii) timely and important applications in macroeconomics.