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Topics in nonparametric comparative statics and stability

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  • George Lady

Abstract

This paper presents the analysis of the Jacobian matrix of a small, macroeconomic model to determine the robustness of the model's comparative statics. The values of the model's coefficients are assessed with respect to seven alternative estimation strategies such as ordinary least squares or two-stage least squares. For each alternative version, the invertibility and stability of the Jacobian matrix is studied. The model is robust to the degree that these characteristics are shared by any matrix with the same sign pattern or other similar nonparametric conditions on its entries. One way to address the relative success of the different estimation strategies is through the robustness of the comparative statics of the resulting model. Copyright International Atlantic Economic Society 2000

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  • 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.
    • Handle: RePEc:kap:iaecre:v:6:y:2000:i:1:p:67-83:10.1007/bf02295752
    DOI: 10.1007/BF02295752
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    1. Kelvin Lancaster, 1962. "The Scope of Qualitative Economics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(2), pages 99-123.
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    8. Lady, George M. & Maybee, John S., 1983. "Qualitatively invertible matrices," Mathematical Social Sciences, Elsevier, vol. 6(3), pages 397-407, December.
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    Cited by:

    1. Buck, Andrew J. & Lady, George M., 2012. "Structural sign patterns and reduced form restrictions," Economic Modelling, Elsevier, vol. 29(2), pages 462-470.
    2. Andrew J. Buck & George M. Lady, 2015. "A New Approach to Model Verification, Falsification and Selection," Econometrics, MDPI, vol. 3(3), pages 1-28, June.
    3. 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.
    4. W D A Bryant, 2009. "General Equilibrium:Theory and Evidence," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 6875, December.
    5. Buck, Andrew J. & Lady, George M., 2005. "Falsifying economic models," Economic Modelling, Elsevier, vol. 22(5), pages 777-810, September.
    6. Lady, George M. & Buck, Andrew J., 2011. "Structural models, information and inherited restrictions," Economic Modelling, Elsevier, vol. 28(6), pages 2820-2831.
    7. Paul Oslington, 2012. "General Equilibrium: Theory and Evidence," The Economic Record, The Economic Society of Australia, vol. 88(282), pages 446-448, September.

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