Testing Models with Multiple Equilibria by Quantile Methods
In this paper, we present methods for deriving testable implication from models with multiple equilibria. Our framework includes many economic models with a one-dimensional endogenous variable---examples are macroeconomic growth models (Solow, 1956), partial equilibrium models, and games of strategic complementarities. Unlike traditionally assumed in the literature, the multiple equilibria models considered here have no implications for the conditional mean of the endogenous variable. We show that such models typically have strong implications for the tail of the conditional distribution of the endogenous variable. We present an econometric framework for testing these implications which reposes on quantile methods and extreme-value theory. We construct a novel order-restricted test based on conditional quantiles of the endogenous variable rather than its mean, which distinguishes our approach from commonly used tests similar to that of Bartholomew (1959)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||11 Aug 2004|
|Date of revision:|
|Contact details of provider:|| Phone: 1 212 998 3820|
Fax: 1 212 995 4487
Web page: http://www.econometricsociety.org/pastmeetings.aspEmail:
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ecm:nasm04:447. 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: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.