You've got to look out for the lags

Another attempt at an econometrics poem - this one to end my lecture introducing distributed lags and dynamic models


You asked me for some comments
On the models you have tried
Some instantaneous feedback
On what you've specified

My immediate conclusion
Is you should have tried some lags
Your perspective's far too static
You've got to look out for the lags

You've got to look out for the lags
You've got to look out for the lags
Don't want to be over dramatic
But you've got to look out for the lags

Yes you've made a big assumption
That all adjustments will be fast
Come in the current period
Nothing left there from the past

But responses may be spread out
So think about some lags
Your perspective's far too static
You've got to look out for the lags

You've got to look out for the lags
You've got to look out for the lags
Guess I must be quite emphatic
You've got to look out for the lags

When expectations are allowed for
And agents plan ahead
Adaptively or rational
It's just as I have said

Disequilibrium adjustments
Error feedback to include
Your perspective's far too static
You've got to look out for the lags

You've got to look out for the lags
You've got to look out for the lags
More dynamic than instamatic
You've got to look out for the lags

With general to specific
Please test rather than impose
The restrictions you consider
Appropriate to propose

When using time series data
You have to try some lags
Just be a bit pragmatic
And look out for the lags

You've got to look out for the lags
You've got to look out for the lags
If you do I'll be ecstatic
You've got to look out for the lags