Structural Models, Information and Inherited Restrictions
AbstractThe derived structural estimates of the system beta Y = gamma Z | delta U impose identifying restrictions on the reduced form estimates ex post. Some or all of the derived structural estimates are presented as evidence of the modelâ€™s efficacy. In fact, the reduced form inherits a great deal of information from the structureâ€™s restrictions and hypothesized sign patterns, limiting the allowable signs for the reduced form. A method for measuring a structural modelâ€™s statistical information content is proposed. Further, the paper develops a method for enumerating the allowable reduced form outcomes which can be used to falsify the proposed model independently of significant coefficients found for the structural relations.
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Bibliographic InfoPaper provided by Department of Economics, Temple University in its series DETU Working Papers with number 1103.
Date of creation: Jun 2011
Date of revision:
Qualitative Analysis; Structural Form; Reduced Form; Identification; Model Falsification; Entropy;
Other versions of this item:
- Lady, George M. & Buck, Andrew J., 2011. "Structural models, information and inherited restrictions," Economic Modelling, Elsevier, vol. 28(6), pages 2820-2831.
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
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