Econometric models I look at suggest unemployment averages over 9 percent through 2015.

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Mr Varian and Ms Choi show that the addition of these search trends to econometric models improves the accuracy of their estimates.

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But it turned out to be deeper than we knew or most of the econometric models showed, most of the blue chip estimates.

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Do our modern day econometric models have the ability to understand the impacts of fiscal retrenchment after a financial crisis having been calibrated in a period of excessive leverage?

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