Building a Structural Model: Parameterization and Structurality†
Institut de Statistique, Biostatistique et Sciences Actuarielles (ISBA), Université catholique de Louvain, Louvain-la-Neuve, Belgium
Department of Economics, University of Bologna, 40126 Bologna, Italy
The work underlying this paper started in 1984 under the heading “A Fallacious Argument in Econometric modeling” and since that period took advantage of a large number of comments from many colleagues. Incorporating these comments, the present version benefited from particularly useful comments from G.Wunsch and from the participants of the Seminar of the Economic Department of the University of Bologna (I). The authors are also indebted to three anonymous referees, whose comments have been invaluable in improving the exposition of this paper.
Author to whom correspondence should be addressed.
Academic Editor: Kerry Patterson
Received: 2 December 2015 / Revised: 18 February 2016 / Accepted: 24 March 2016 / Published: 12 April 2016
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. Discussions of observationally equivalent models related to different economic mechanisms are used to make clear the connection between an economically 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.
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MDPI and ACS Style
Mouchart, M.; Orsi, R. Building a Structural Model: Parameterization and Structurality. Econometrics 2016, 4, 23.
Mouchart M, Orsi R. Building a Structural Model: Parameterization and Structurality. Econometrics. 2016; 4(2):23.
Mouchart, Michel; Orsi, Renzo. 2016. "Building a Structural Model: Parameterization and Structurality." Econometrics 4, no. 2: 23.
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