IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v28y2011i6p2820-2831.html
   My bibliography  Save this article

Structural models, information and inherited restrictions

Author

Listed:
  • Lady, George M.
  • Buck, Andrew J.

Abstract

The derived structural estimates of the system βY=γZ+δU impose identifying restrictions on the reduced form estimates ex post. Some or all of the derived structural estimates are presented as evidence of the model's efficacy. In fact, the reduced form inherits a great deal of information from the structure's restrictions and hypothesized sign patterns, limiting the allowable signs for the reduced form. A method for measuring a structural model'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.

Suggested Citation

  • Lady, George M. & Buck, Andrew J., 2011. "Structural models, information and inherited restrictions," Economic Modelling, Elsevier, vol. 28(6), pages 2820-2831.
  • Handle: RePEc:eee:ecmode:v:28:y:2011:i:6:p:2820-2831
    DOI: 10.1016/j.econmod.2011.08.021
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999311002136
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Blanchard, Olivier Jean & Quah, Danny, 1989. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," American Economic Review, American Economic Association, vol. 79(4), pages 655-673, September.
    2. Buck, Andrew J. & Lady, George M., 2005. "Falsifying economic models," Economic Modelling, Elsevier, vol. 22(5), pages 777-810, September.
    3. Christopher A. Sims, 1986. "Are forecasting models usable for policy analysis?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win, pages 2-16.
    4. Kelvin Lancaster, 1962. "The Scope of Qualitative Economics," Review of Economic Studies, Oxford University Press, vol. 29(2), pages 99-123.
    5. Andrew J. Buck & George M. Lady, 2010. "An Expanded Scope For Qualitative Economics," DETU Working Papers 1007, Department of Economics, Temple University.
    6. Lady, George M. & Quirk, James P., 2007. "The scope of the LeChatelier Principle," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 381(C), pages 351-365.
    7. Gilbert, Christopher L, 1986. "Professor Hendry's Econometric Methodology," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 48(3), pages 283-307, August.
    8. Lady, George M, 1983. "The Structure of Qualitatively Determinate Relationships," Econometrica, Econometric Society, vol. 51(1), pages 197-218, January.
    9. Ritschard, Gilbert, 1983. "Computable Qualitative Comparative Static Techniques," Econometrica, Econometric Society, vol. 51(4), pages 1145-1168, July.
    10. Leamer, Edward E, 1983. "Let's Take the Con Out of Econometrics," American Economic Review, American Economic Association, vol. 73(1), pages 31-43, March.
    11. George Lady, 2000. "Topics in nonparametric comparative statics and stability," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(1), pages 67-83, February.
    12. Kelvin Lancaster, 1966. "The Solution of Qualitative Comparative Static Problems," The Quarterly Journal of Economics, Oxford University Press, vol. 80(2), pages 278-295.
    13. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    14. Hendry, David F, 1980. "Econometrics-Alchemy or Science?," Economica, London School of Economics and Political Science, vol. 47(188), pages 387-406, November.
    15. repec:kap:iaecre:v:6:y:2000:i:1:p:67-83 is not listed on IDEAS
    16. Lady, George M. & Maybee, John S., 1983. "Qualitatively invertible matrices," Mathematical Social Sciences, Elsevier, vol. 6(3), pages 397-407, December.
    17. George Lady & James Quirk, 2010. "The global LeChatelier Principle and multimarket equilibria," Review of Economic Design, Springer;Society for Economic Design, vol. 14(1), pages 193-201, March.
    18. Titus O. Awokuse & David A. Bessler, 2003. "Vector Autoregressions, Policy Analysis, and Directed Acyclic Graphs: An Application to the U.S. Economy," Journal of Applied Economics, Universidad del CEMA, vol. 6, pages 1-24, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andrew J. Buck & George M. Lady, 2016. "Estimating a Falsified Model," DETU Working Papers 1601, Department of Economics, Temple University.
    2. Andrew J. Buck & George M. Lady, 2015. "A New Approach to Model Verification, Falsification and Selection," Econometrics, MDPI, Open Access Journal, vol. 3(3), pages 1-28, June.
    3. Andrew J. Buck & George M. Lady, 2015. "Estimating a Falsified Model: Some Impossibility Theorems," DETU Working Papers 1506, Department of Economics, Temple University.

    More about this item

    Keywords

    Qualitative analysis; Structural form; Reduced form; Identification; Entropy; Model falsification;

    JEL classification:

    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:28:y:2011:i:6:p:2820-2831. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.