But more importantly, in case a structural change is truly under way, macroeconomic relationships derived from empirical regularities and historical averages are bound to lose significance. A new set of relationships would need to be estimated and tested. But serious diagnostics for structural stability rarely give definitive answers. And re-estimation requires sufficiently extended spans of data that simply do not yet exist.
Structural change on a global scale The past decade, on both sides of the Atlantic, has not been kind to policymakers’ aspiration to a comfortably stable set of structural relations usable for policy analysis.