Parameter estimation for a computable general equilibrium model: a maximum entropy approach
AbstractWe introduce a maximum entropy approach to parameter estimation for computable general equilibrium (CGE) models. The approach applies information theory to estimating a system of nonlinear simultaneous equations. It has a number of advantages. First, it imposes all general equilibrium constraints. Second, it permits incorporation of prior information on parameter values. Third, it can be applied in the absence of copious data. Finally, it supplies measures of the capacity of the model to reproduce the historical record and the statistical significance of parameter estimates. The method is applied to estimating a CGE model of Mozambique.
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Bibliographic InfoPaper provided by International Food Policy Research Institute (IFPRI) in its series TMD discussion papers with number 40.
Date of creation: 1999
Date of revision:
Estimation theory.; Equilibrium (Economics) Models.; Mozambique.;
Other versions of this item:
- Arndt, Channing & Robinson, Sherman & Tarp, Finn, 2002. "Parameter estimation for a computable general equilibrium model: a maximum entropy approach," Economic Modelling, Elsevier, vol. 19(3), pages 375-398, May.
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