Our research group, Growth and Business Cycles, aims specifically to analyse and forecast short and long term macroeconomic variables. This particular emphasis makes the standard instruments of econometric analysis that do not take adequate consideration of the theoretic foundation for long-term relationships of economic variables insufficient. The goal of this project is, therefore, a development of appropriate analytical tools for evaluating and forecasting short and, in particular, long-term effects of policy. We envision a methodology-package that incorporates both macroeconometric and macrotheoretic models. The macroeconometric model follows the newly developed VARX-Approach of Garratt et al. (2006) with cointegrated Variables and will consider in its estimation theoretically-supported long-term relationships between economic variables as cointegration-relations. The macrotheoretic model follows the work of Pissarides (2000) that explicitly models the frictions in labour markets. Both approaches display common characteristics, as well as unique advantages and disadvantages. Thus, the two approaches complement each other in that they impose natural benchmarks against each other: on one hand, similar results would enhance confidence in both methods, and on the other hand, differences in results would lead to improvements in modeling.