The Gravity Model: An Illustration Of Structural Estimation As Calibration
"Dawkins, Srinivasan, and Whalley ("Calibration,""Handbook of Econometrics, "2001) propose that estimation is calibration. We illustrate their point by examining a leading econometric application in the study of international and interregional trade by Anderson and van Wincoop ("Gravity with Gravitas: A Solution to the Border Puzzle,""American Economic Review, "2003). We replicate the econometric process and show it to be a calibration of a general equilibrium model. Our approach offers unique insights into structural estimation, and we highlight the importance of traditional calibration considerations when one uses econometric techniques to calibrate a model for comparative policy analysis. "("JEL "F10, C13, C60) Copyright (c) 2007 Western Economic Association International.
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Volume (Year): 46 (2008)
Issue (Month): 4 (October)
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