Structural Models, Information and Inherited Restrictions
The derived structural estimates of the system beta Y = gamma Z | delta U impose identifying restrictions on the reduced form estimates ex post. Some or all of the derived structural estimates are presented as evidence of the modelâ€™s efficacy. In fact, the reduced form inherits a great deal of information from the structureâ€™s restrictions and hypothesized sign patterns, limiting the allowable signs for the reduced form. A method for measuring a structural modelâ€™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.
|Date of creation:||Jun 2011|
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