Building a structural model: parameterization and structurality
(2015) , 25 pages
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- Abstract
- A specific concept of structural model is used as a background for discussing the structurality of its parameterization. Conditions for a structural model to be also causal are examined. Difficulties and pitfalls arising from the parameterization are analyzed. In particu- lar, pitfalls when considering alternative parameterizations of a same model are shown to have lead to ungrounded conclusions in the lit- erature. Discussion of observationally equivalent models related to different economic mechanisms are used to make clear the connection between an economicall meaningful parameterization and an econom- ically meaningful decomposition of a complex model. The design of economic policy is used for drawing some practical implications of the proposed analysis.
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Citations
Mouchart, M., & Orsi, R. (2015). Building a structural model: parameterization and structurality (CORE Discussion Paper 2015/56). https://hdl.handle.net/2078.5/189230