Bounding Comparative Statics under Diagonal Dominance

Jordan Norris, Charles Johnson () and Ilya Spitkovsky ()
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Ilya Spitkovsky: Division of Social Science

No 20230082, Working Papers from New York University Abu Dhabi, Department of Social Science

Abstract: A core purpose of economic modeling is to conduct comparative static analyzes. Often one is interested in its qualitative features, such as if the e ect of a shock is positive or above one. Yet, except in highly-stylized models, the theoretically implied relationships are intractable, and empirically demanding, requiring complete identication of the model. We derive new bounds on comparative statics that are more tractable and feasible under partial identi cation. We require only that the Jacobian is diagonally dominant | intuitively, there is limited feedback in the model. We demonstrate application in two canonical models: a network game and a model of oligopoly competition. JEL Codes: C3, D85

Pages: 28 pages
Date: 2023-01, Revised 2023-01
New Economics Papers: this item is included in nep-gth and nep-net
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Citations: View citations in EconPapers (1)

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