QMRBC

The RBC vote

In 1983, Long and Plosser introduced the term "real business cycles" (RBC) just after Kydland and Prescott published their time-to-build paper. RBC stuck and has become the acronym for a methodology that is now applied to models that have nothing real and may not even be about real business cycles.

In the first issue of the EconomicDynamics Newsletter, David Backus suggested that a vote should be taken to decide on a new and more appropriate acronym. Well, time has come to do exactly that. I have gathered some suggestions from prominent users of this theory and people that have helped shape it. Here they are, with some arguments to help you make a choice.

The object of the vote

The acronym should represent the methodology whereby economic issues are addressed with dynamic general equilibrium models that are calibrated (or sometimes estimated) in order to obtain quantitative results and/or compute welfare measures. Feel free to differ on this definition.

The choices

Applied Equilibrium Dynamics - AED
Dynamic General Equilibrium Model - DGE
Kydland Prescott Model - KPM
Quantitative Equilibrium Dynamics - QED
Real Business Cycle Theory - RBC
Stochastic CAlibrated Dynamic General Equilibrium - SCADGE
Serious Equilibrium Models - SE

Some endorsements

Edward Prescott, University of Minnesota: Long and Plosser introduced the term real business cycles to distinguish cycles induced by real factors from cycles induced by nominal factors and by financial crises. This I think is good language for this distinction. The term real business cycles has come to have a much broader meaning and I agree with David Backus that a an acronym is needed for the development you describe in your email. The key concepts are quantitative or applied, dynamic, and general equilibrium. This suggests Quantitative Equilibrium Dynamics (QED) or Applied Economic Dynamics (AED).
Julio Rotemberg, Harvard University: SCADGE (pronounced as a one syllable word) stands for Stochastic CAlibrated Dynamic General Equilibrium and these are, to me, the key five words that describe these models. There are many varieties of dynamic general equilibrium models out there (including growth models, of course) and it seems important to distinguish these from the others. Calibration is not the only distinguishing feature, however, as this is done also in the fairly vast literature that calls itslef CGE (or Computational General Equilibrium). What separates this from that is the explicit analysis of second moments, and that is why I put in the S.
Randall Wright, University of Pennsylvania: I sort of like "the DGE model". Although "the Kydland-Prescott Model" (KPM) is even better -- it's accurate and fair.
David Backus, New York University: I agree with Randy: DGE.
Timothy Kehoe, University of Minnesota: I vote for dynamic general equilibrium (although I like "applied").
Patrick Kehoe, Federal Reserve Bank of Minneapolis: I like DGE but you have to admit that it sounds a little nerdy. If we could get away with it, I would prefer SE for Serious Equilibrium models, but it is not clear this this term will fly. The problem with AED or ADE is that it brings to mind the work on Applied General Equilibrium models by the old group at the World Bank that was not so good.
Michael Woodford, Princeton University: DGE models. QED is fine (even better than DGE models) as a way of referring to the literature as a whole. For example, there could be a web page for 'QED', a review article might discuss developments in 'QED', and so on. But it isn't a good term for an individual model: iit would be very awkward to write a paper that begins "I construct an open-economy QED model..." So instead one needs the term 'DGE model' to refer to an individual example. This makes it the better term.

Vote results

DGE	75.9%
SCADGE	9.3%
QED	5.6%
RBC	3.7%
KPM	1.9%
SE	1.9%
other	1.9%

A couple of interesting suggestions:

Rather Be Calibrating - RBC (Peter Summers)
Intertemporal Stochastic Laboratory Models (Franck Portier)

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