Chapter 1 Estimation of Parameters of Constrained Optimization Models
New Developments in Computable General Equilibrium Analysis for Trade Policy
ISBN: 978-0-85724-141-2, eISBN: 978-0-85724-142-9
Publication date: 24 September 2010
Abstract
Estimating parameters of constrained optimization models in a consistent way requires a different set of methods than what is available in a typical econometric toolkit. We identify three complications likely to arise in this context, and suggest solutions to those complications: (i) the bi-level programming character, (ii) ill-posedness, and (iii) derivation of estimator properties. The solutions suggested involve a combination of numerical techniques and utilization of out-of-sample information through Bayesian techniques. The proposed framework is also suitable for typical empirical problems arising in trade analysis such as the estimation of trade equilibrium models and data balancing exercises.
Keywords
Citation
Jansson, T. and Heckelei, T. (2010), "Chapter 1 Estimation of Parameters of Constrained Optimization Models", Gilbert, J. (Ed.) New Developments in Computable General Equilibrium Analysis for Trade Policy (Frontiers of Economics and Globalization, Vol. 7), Emerald Group Publishing Limited, Leeds, pp. 1-26. https://doi.org/10.1108/S1574-8715(2010)0000007004
Publisher
:Emerald Group Publishing Limited
Copyright © 2010, Emerald Group Publishing Limited