EQUILIBRIUM COUNTERFACTUALS

نویسندگان

چکیده

We incorporate structural modelers into the economy they model. Using traditional moment matching, treat policy changes as zero probability (or exogenous) “counterfactuals.” Bias occurs since real-world agents understand are positive events guided by modelers. Downward, upward, or sign bias occurs. is illustrated calibrating Leland model to 2017 tax cut. The identifying assumption, constant partial derivative sign, incorrect with optimization. correct assumption total accounting for estimation-policy feedback. Model agent expectations can be updated iteratively until advice converges expectations, vanishing.

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ژورنال

عنوان ژورنال: International Economic Review

سال: 2021

ISSN: ['1468-2354', '0020-6598']

DOI: https://doi.org/10.1111/iere.12513