General-to-specific procedures for fitting a data-admissible, theory- inspired, congruent, parsimonious, encompassing, weakly-exogenous, identified, structural model to the DGP: a translation and critique

Jon Faust (faustj@jhu.edu) and Charles Whiteman (whiteman@uiowa.edu)

No 576, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We characterize the LSE approach by its implications for reduced-form modeling and structural interpretations. Much of what has come to be associated with the LSE methodology involves the approach to fitting reduced forms, and can be thought of as a pragmatic solution to problems created by short samples plagued by serial correlation. The policy analysis one might be able to do with an LSE model, on the other hand, hinges on structural identification arguments which do not meet the classic Cowles Commission standards, and is thus suspect.

Keywords: Macroeconomics (search for similar items in EconPapers)
Date: 1997
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Citations: View citations in EconPapers (12)

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Journal Article: General-to-specific procedures for fitting a data-admissible, theory-inspired, congruent, parsimonious, encompassing, weakly-exogenous, identified, structural model to the DGP: A translation and critique (1997)
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