The first of two major surveys of the latest and most important developments in applied econometrics, the Handbook of Applied Econometrics, Volume I: Macroeconomics focuses on key topics in macroeconomics and finance. Each topic is covered by a leading international expert specially commissioned to address the methodological problems of undertaking empirical work in economics and to provide rigorous applications of econometric and statistical methods to economics problems. This authoritative overview of the applied work that is happening in the field makes it an essential resource for academics, researchers, graduate students and professional economists in industry and government. This volume covers econometric issues involved in a variety of applied macroeconomic problems: * the source of the stochastic structure of economic models, especially the role of expectations; * the stochastic properties of economic data and the implications for modeling, estimation and testing; * the role of economic theory in model building and the relation between statistical models and economic theory; * equilibrium and disequilibrium models.