The econometric critique of computable general equilibrium modeling: the role of functional forms

被引:75
作者
McKitrick, RR [1 ]
机构
[1] Univ Guelph, Dept Econ, Guelph, ON N1G 1M8, Canada
关键词
computable general equilibrium; econometric modeling; flexible functional forms; comparative modeling;
D O I
10.1016/S0264-9993(98)00028-5
中图分类号
F [经济];
学科分类号
02 ;
摘要
Computable general equilibrium (CGE) models are among the most influential tools in applied economics. However, some serious questions have been raised about the empirical validity of these models. The core of the critique is that the parameter selection criteria are unsound and the use of first-order (CES class) functional forms imposes influential restrictions on the model's structure. A formal summary of the case against standard CGE modeling is presented, as is an alternative econometric-based modeling strategy which answers the critique. We then present a comparative CGE modeling experiment designed to assess the role of function forms. It is found that choice of functional forms affects not only industry-specific results, but aggregate results as well, even for small policy shocks. (C) 1998 Elsevier Science B.V. All rights reserved. JEL classifications: C51, D58.
引用
收藏
页码:543 / 573
页数:31
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