Whether they should or not, few economists do in fact refrain from
making pronouncements on public policy, although the state of the
economy (both here and elsewhere) suggests that either the advice given
is bad or, if good, that it is ignored . . . I happen to think that we
are appallingly ignorant about many aspects of the working of the
economic system -- the economics of the firm and industry. Ronald H
Coase, Economists and Public Policy In this volume we attempt to address
an element of Coase's concern by linking the empirical economics of the
fInn and industry more closely to macroeconomic policies, and to
demonstrate how to assess some of the effects of those policies. The
scope of our study ranges from a structural macroeconomic model of the
United States, from which macroeconomic effects are propagated to
detailed structural models of SIC four digit industries. The rationale
for our approach is very much in the spirit of various integrated
macroeconomic/industry models constructed by Dale Jorgenson, working
with various collaborators. Our approach is also consistent with, and
motivated by, Lawrence Klein's agenda of modeling explicitly and
structurally the macro and sectoral elements in the national economy. We
also examine the effects of the macroeconomic policies of different
countries on the enterprise. In only one case, our examination of
crowding out of private investment by government defIcit fmancing, is
the linkage among sectors implicit.
