Building a structural model: parameterization and structurality

M. Mouchart () and Renzo Orsi
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M. Mouchart: Université catholique de Louvain, CORE, Belgium

No 2015056, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

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.

Keywords: structural model; recursive decomposition; exogeneity; causal- ity; model identification; observationally equivalent models; structural invariance; misleading constraints (search for similar items in EconPapers)
Date: 2015-11-25
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Related works:
Journal Article: Building a Structural Model: Parameterization and Structurality (2016)
Working Paper: Building a Structural Model: Parameterization and Structurality (2016)
Working Paper: Building a structural model: parameterization and structurality (2015)
Working Paper: Building a Structural Model: Parameterization and Structurality (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2015056

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