In recent years, the economies of many countries of the world are in a situation of intense shock processes. The current situation urgently needs to change the economic paradigm in the near future, which objectively requires the development of new conceptual models. The purpose of the paper is to develop the basic theoretical provisions of a new macroeconomics based on impulse and jump processes. Research problems are the following: 1) to describe the main types of impulse and jump functions with examples from economic theory and practice; 2) to perform an analytical representation of impulse and jump functions; 3) to select macroeconomic characteristics for the analysis of rapidly changing processes in the economy; 4) to create models and mechanisms for predicting impulsive and abrupt changes in macroeconomics. The approaches to the development of macroeconomic theory and its methods proposed in the article are not associated with the use of evolutionary continuous functions, for example, power functions, which is typical for many canonical macroeconomic models. These approaches do not include management decisions to achieve optimal values of given target functions, which is typical for recursive macroeconomic models of dynamic programming. This article is about formulating the foundations of macroeconomic theory and its methods, which, with some degree of accuracy, could give a forecast about the impending possibility of abrupt changes (impulse, shock, jump, stepwise and others) in the macroeconomic situation. The research methodology is statistical analysis, special methods for studying impulse and jump processes developed by the author. As a result of the study, the main provisions of the macroeconomic theory based on rapid impulse and spasmodic changes were formulated, approaches were outlined for constructing the tools of this theory, problems and tasks for further research were identified.

This survey paper discusses the Cointegrated VAR methodology and how it has evolved over the last 30 years. The first section is a description of major steps in the econometric development of the CVAR model that facilitated serious real world applications. The next three sections are primarily methodological and discuss (i) difficulties and puzzles when confronting theory with the data, (ii) the formulation of a viable link between theory and the data, a so called theory-consistent CVAR scenario, and (iii) how all this was inspired by Trygve Haavelmo and his Nobel prize winning monograph "The Probability Approach to Economics". The next two sections discuss early applications of the Cointegrated VAR model to monetary transmission mechanisms, international transmission mechanisms and wage, price and unemployment dynamics. They report puzzling evidence, discuss the need for new theory, and propose a method for combining partial CVAR analyses into a larger macroeconomic model. The following sections propose a new, empirically-based, approach to macroeconomics in which imperfect knowledge based expectations replace so called rational expectations and in which the financial sector plays a key role for understanding the long persistent movements in the data. The last section argues that the CVAR can act as a "design of experiment for passive observations" and illustrates with several applications including unemployment dynamics under crises periods and aid effectiveness in South Saharan African countries.

In this paper we present an application of the dynamic tracking games framework to a monetary union. We use a small stylized nonlinear three-country macroeconomic model of a monetary union to analyse the interactions between fiscal (governments) and monetary (common central bank) policy makers, assuming different objective functions of these decision makers. Using the OPTGAME algorithm we calculate solutions for several games: a noncooperative solution where each government and the central bank play against each other (a feedback Nash Equilibrium solution), a fully cooperative solution with all players following a joint course of action (a Pareto optimal solution), and three solutions where various coalitions (subsets of the players) play against coalitions of the other players in a noncooperative way. It turns out that the fully cooperative solution yields the best results, the noncooperative solution fares worst, and the coalition games lie in between, with a broad coalition of the fiscally more responsible countries and the central bank against the less thrifty country coming closest to the Pareto optimum.