Pitfalls in counterfactual analyses of policy rules
AbstractThis analysis examines the validity of utilizing a subset of reduced form equations, such as from a VAR model, for the construction of counterfactual policy analyses. It is shown that the omission of one of the estimated reduced form (VAR) equations and the substitution of a counterfactual policy rule to complete the model severely limits the admissible structure of the economic model that could have generated the historical data. Copyright Kluwer Academic Publishers 1995
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Bibliographic InfoArticle provided by Springer in its journal Open Economies Review.
Volume (Year): 6 (1995)
Issue (Month): 3 (July)
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Web page: http://www.springerlink.com/link.asp?id=100323
policy analysis; reduced forms; VAR;
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