Dynamic equilibrium economies: a framework for comparing models and data

Francis X. Diebold (), Lee Edward Ohanian () and Jeremy Berkowitz

No 243, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: We propose a constructive, multivariate framework for assessing agreement between (generally misspecified) dynamic equilibrium models and data, a framework which enables a complete second-order comparison of the dynamic properties of models and data. We use bootstrap algorithms to evaluate the significance of deviations between models and data, and we use goodness-of-fit criteria to produce estimators that optimize economically relevant loss functions. We provide a detailed illustrative application to modeling the U.S. cattle cycle.

Keywords: Equilibrium (Economics) - Mathematical models; Cattle trade (search for similar items in EconPapers)
Date: 1998
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Related works:
Journal Article: Dynamic Equilibrium Economies: A Framework for Comparing Models and Data (1998)
Working Paper: Dynamic equilibrium economies: a framework for comparing models and data (1997)
Working Paper: Dynamic equilibrium economies: a framework for comparing models and data (1997)
Working Paper: Dynamic Equilibrium Economies: A Framework for Comparing Models and Data (1995)
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