Computing, the bootstrap and economics

Russell Davidson

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Abstract: A major contention in this paper is that scientific models can be viewed as virtual realities, implemented, or rendered, by mathematical equations or by computer simulations. Their purpose is to help us understand the external reality that they model. In economics, particularly in econometrics, models make use of random elements, so as to provide quantitatively for phenomena that we cannot or do not wish to model explicitly. By varying the realizations of the random elements in a simulation, it is possible to study counterfactual outcomes, which are necessary for any discussion of causality. The bootstrap is virtual reality within an outer reality. The principle of the bootstrap is that, if its virtual reality mimics as closely as possible the reality that contains it, it can be used to study aspects of that outer reality. The idea of bootstrap iteration is explored, and a discrete model discussed that allows investigators to perform iteration to any desired level.

Keywords: Economie; quantitative (search for similar items in EconPapers)
Date: 2016-01
Note: View the original document on HAL open archive server: https://amu.hal.science/hal-01448239
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Citations: View citations in EconPapers (3)

Published in Canadian Journal of Economics, 2016, 48 (4), pp.1195--1214. ⟨10.1111/caje.12158⟩

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Journal Article: Computing, the bootstrap and economics (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01448239

DOI: 10.1111/caje.12158

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