Structural Models, Information and Inherited 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

The derived structural estimates of the system βY=γZ|δU impose identifying restrictions on the reduced form estimates ex post. Some or all of the derived structural estimates are presented as evidence of the model’s efficacy. In fact, the reduced form inherits a great deal of information from the structure’s restrictions and hypothesized sign patterns, limiting the allowable signs for the reduced form. A method for measuring a structural model’s statistical information content is proposed. Further, the paper develops a method for enumerating the allowable reduced form outcomes which can be used to falsify the proposed model independently of significant coefficients found for the structural relations.

George M. Lady, Andrew J. Buck Coders: George M. Lady, Andrew J. Buck, et al. "Structural Models, Information and Inherited Restrictions." Economic Modelling (2011).     Retrieved 09/15/2019 from

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created 11/12/2013

modified 01/16/2014

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