Econometric Analysis of Discrete Reforms

Alexei Kireyev ()

No 2001/156, IMF Working Papers from International Monetary Fund

Abstract: The paper suggests an econometric methodology for testing the effectiveness of reforms implemented in one major step, i.e., discrete reforms. The methodology is based on the exogeneity properties of variables in an econometric model. The paper specifies the preconditions for setting up an appropriate model; suggests an economic interpretation of the tests for weak, strong, and superexogeneity; and illustrates this methodology by applying it to two cases of instantaneous reforms. The exogeneity properties of variables in a correctly specified econometric model may help uncover information on the preparation, implementation, and the outcome of such reforms, which could be useful for future policy advice.

Keywords: WP; tax reform; economic policy; real GDP; ES irrt der Mensch; exogeneity; testing reforms; econometric policy analysis; reform step dummy; exogeneity property; transmission variable; reform efficiency analysis; reform decision; exogeneity analysis; exchange rate reform; reform d; reform process consist; exogeneity properties of a tax variable; one-step reform; policy reform; Econometric models; Exchange rate unification; Exchange rates; Exchange rate arrangements; A. data sources; exogeneity properties; effectiveness of reform; appendix table; model analysis (search for similar items in EconPapers)
Pages: 38
Date: 2001-10-01
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Citations: View citations in EconPapers (1)

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