Study week on the econometric approach to development planning

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Title:: Dynamic structure and estimation in economy-wide econometric models / FranklinM. Fisher, Massachuetts Institute of Technology - Cambridge, Mass. - U.S.A.

Collection:: Economics Books

398 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 2% failure of (R.2) and (R.3), in particular, are arguments that the excluded effects are likely to be substantial in practice. While one may be willing to assume that they are not so in particular cases, depending on the structure of the model to be estimated, this seems a dangerous procedure in most eco- nomy-wide models given the high degree of approximation which such models inevitably involve. The Proximity Theorem in more general form will be of considerable help to us below and is of substantial value in other contexts; for structural estimation in economy-wide models, it seems a weak reed on which to rest estimation by ordinary least squares. 2.5. Reduced Form Estimation Our discussion thus far has run in terms of the estimation of the parameters of structural equations. The simultaneous model context in which ordinary least squares is most often thought to be appropriate, however, is not this at all, but rather in the estimation of the equations of the reduced form. Here the difficulties in the use of ordinary least squares which arise from simultaneity apparently disappear as all variables on the right-hand side of reduced form equations are either exogenous or lagged. In this connection, the argument against the use of ordinary least squares has generally run in terms of lack of asymptotic efficiency when compared with estimates of the reduced form which are derived from structural estimates using overidentify- ing a priori information. Such lack of asymptotic efficiency may be particularly important in the event of a structural break or in the prediction of turning points (14). The argument in favor of ordinary least squares estimates of reduced form equa- tions has been the desirability of having forecasts of the endo- (%) LesNoy [18] ‘61 Fisher - pag. 14

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