Putting Quantitative Models to the Test: An Application to Trump’s Trade War

Rodrigo Adão, Arnaud Costinot and Dave Donaldson

No 31321, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The primary motivation behind quantitative modeling in international trade and many other fields is to shed light on the economic consequences of policy changes. To help assess and potentially strengthen the credibility of such quantitative predictions we introduce an IV-based goodness-of-fit measure that provides the basis for testing causal predictions in arbitrary general-equilibrium environments as well as for estimating the average misspecification in these predictions. As an illustration of how to use our IV-based goodness-of-fit measure in practice, we revisit the welfare consequences of Trump's trade war predicted by Fajgelbaum, Goldberg, Kennedy and Khandelwal (2020).

JEL-codes: C52 C68 E17 F10 R10 (search for similar items in EconPapers)
Date: 2023-06
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Working Paper: Putting quantitative models to the test: An application to Trump's trade war (2024)
Working Paper: Putting quantitative models to the test: an application to Trump's trade war (2024)
Working Paper: Putting Quantitative Models to the Test: An Application to Trump’s Trade War (2023)
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