Structural Sign Patterns and Reduced Form Restrictions

George M. Lady, Andrew J. Buck Coders: George M. Lady, Andrew J. Buck

Code and Data Abstract

This program is a Monte Carlo simulation of reduced form sign patterns based upon structural sign patterns specified by the user. The basic purpose of the program is to determine if a proposed reduced form sign pattern could possibly be generated by the proposed structural sign patterns. The application was compiled in Visual Studio 6 to run under the Windows operating system. This software was used in support of the work reported on in: - Lady, George and Andrew Buck (2011). "Structural Models, Information and Inherited Restrictions", Economic Modelling, 28, pp. 2820-2831.. - Buck, Andrew and George Lady (2012)."Structural Sign Patterns and Reduced Form Restrictions", Economic Modelling, 29, pp. 462-470. For more details, please read the following document.

Paper Abstract

This paper reconsiders the degree to which the signpatterns of hypothesized structural arrays limit the possible outcomes for the signpattern of the corresponding estimated reducedform. The conditions under which any structuralrestrictions would apply were believed to be very narrow, rarely found to apply, and virtually never investigated. As a result, current practice does not test the structural hypothesis in terms of the comparison of the estimated reducedform and the permissible reducedformsignpatterns. This paper shows that such tests are always possible. Namely, that the signpatterns of the hypothesized structural arrays always limit the signpatterns that can be taken on by the estimated reducedform. Given this, it is always possible to falsify a structural hypothesis based only upon the signpattern proposed. Necessary conditions, algorithmic principles, and examples are provided to illustrate the analytic principle and the means of its application.

George M. Lady, Andrew J. Buck Coders: George M. Lady, Andrew J. Buck, et al. "Structural Sign Patterns and Reduced Form Restrictions." Economic Modelling (2012).     Retrieved 09/15/2019 from researchcompendia.org/compendia/2013.139/

Page Owner

sheila@codersquid.com

created 11/12/2013

modified 01/16/2014

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