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Building a Structural Model: Parameterization and Structurality

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  • M. Mouchart
  • R. Orsi

Abstract

A specific concept of structural model is used as a background for discussing the structurality of its parameterization. Conditions for a structural model to be also causal are examined. Difficulties and pitfalls arising from the parameterization are analyzed. In particular, pitfalls when considering alternative parameterizations of a same model are shown to have lead to ungrounded conclusions in the literature. Discussion of observationally equivalent models related to different economic mechanisms are used to make clear the connection between an economicall meaningful parameterization and an economically meaningful decomposition of a complex model. The design of economic policy is used for drawing some practical implications of the proposed analysis.

Suggested Citation

  • M. Mouchart & R. Orsi, 2015. "Building a Structural Model: Parameterization and Structurality," Working Papers wp1039, Dipartimento Scienze Economiche, Universita' di Bologna.
  • Handle: RePEc:bol:bodewp:wp1039
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    References listed on IDEAS

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    1. Genberg, Hans, 1972. "Constraints on the Parameters in Two Simple Simultaneous Equation Models," Econometrica, Econometric Society, vol. 40(5), pages 855-865, September.
    2. J.-F. Richard, 1980. "Models with Several Regimes and Changes in Exogeneity," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 1-20.
    3. Zellner, Arnold, 1976. "Constraints Often Overlooked in Analyses of Simultaneous Equation Models: Further Reply," Econometrica, Econometric Society, vol. 44(3), pages 627-628, May.
    4. Maddala, G S, 1976. "Constraints Often Overlooked in Analyses of Simultaneous Equation Models: Comment," Econometrica, Econometric Society, vol. 44(3), pages 615-616, May.
    5. Maddala, G S, 1976. "Constraints Often Overlooked in Analyses of Simultaneous Equation Models: Rejoinder," Econometrica, Econometric Society, vol. 44(3), pages 625-625, May.
    6. Florens, J.P. & Mouchart, M. & Rolin, J.M., 1993. "Noncausality and Marginalization of Markov Processes," Econometric Theory, Cambridge University Press, vol. 9(02), pages 241-262, April.
    7. Bowden, Roger J, 1978. "Specification, Estimation and Inference for Models of Markets in Disequilibrium," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(3), pages 711-726, October.
    8. Zellner, Arnold, 1972. "Constraints Often Overlooked in Analyses of Simultaneous Equation Models," Econometrica, Econometric Society, vol. 40(5), pages 849-853, September.
    9. Zellner, Arnold, 1976. "Constraints Often Overlooked in Analyses of Simultaneous Equation Models: Reply," Econometrica, Econometric Society, vol. 44(3), pages 619-624, May.
    10. Fair, Ray C & Jaffee, Dwight M, 1972. "Methods of Estimation for Markets in Disequilibrium," Econometrica, Econometric Society, vol. 40(3), pages 497-514, May.
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    More about this item

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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