Fifteen years after the Global Financial Crisis: Recessions and Business Cycles in the History of Economic Thought

Programming Expertise: The Political Element in Bergmann’s Micro-Simulation

Chassonnery-Zaïgouche Cléo, Università di Bologna
Goutsmedt Aurélien, UC Louvain (ISPOLE) - F.R.S.-FNRS

Over a period of twelve years, Barbara Bergmann developed several models of the labor market using micro-simulation. She eventually integrated them in a “transactions model” of the entire US economy, built with Robert Bennett and published in 1986. The paper describes the history of the various projects first financed by the Office of Economic Opportunities, and then by a grant from the National Science Foundation. The paper shows how Bergmann’s micro-modelling approach, while being in direct filiation with Orcutt’s micro-simulation methods in the 1960s, aimed at targeting a more macroeconomic audience, and so at dealing with macroeconomic policy issues. Bergman's approach is thus embedded in the political and intellectual context of the 1970s and 1980s. The first section describes Bergman’s micro-simulation of the labor market in the context of the late ‘war on poverty’. The second section shows how a “political element” is integrated in modeling policy experiments. The goal of Bergman's approach was to develop a new look at macroeconomic policies, more able to take into account heterogeneity and distributional effects. In the last section, Bergman's approach is situated within the history of the microfoundations of macroeconomics debates ofthe 1970s, as well as within the debates regarding the use (and supposed failures) of macroeconometric forecasting during the period. The modeling of policy experiments with the objective to assess their distributional effects on various groups of the population is the major difference with contemporary macroeconomics modeling approach. We finally discuss why her approach has eventually not been firmly anchored in macroeconomics.

Area: Eshet Conference

Keywords: Microfoundations; Micro-Simulations; Barbara Bergman; Macroeconometric modelling

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