Economics Dictionary of ArgumentsHome
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| Calibration: Calibration in economics is a method of assigning values to model parameters so that the model closely replicates real-world data. Unlike estimation, it uses observed values directly rather than statistical inference. Calibration is commonly used in dynamic macroeconomic and computable general equilibrium (CGE) models to analyze policy impacts and economic behavior. See also Models, Model theory._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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L. Alan Winters on Calibration - Dictionary of Arguments
Krugman III 212 Calibration/Winters: Calibration studies are useful for illustrating the mechanisms of the models they treat and for assessing the relative sizes of the effects they postulate, and with sufficient sensitivity analysis they can produce robust results of direct relevance to policymakers. They are, however, only the first step toward the full empirical investigation of strategic trade policy. Baldwin (1989)(1) suggests a second step-namely a more thorough attempt to estimate the relevant parameters from many (or at least several) data points. In this paper(2) I explore a third level of empiricism-an attempt to test directly for the presence of strategic effects. >Strategic trade policy, >Trade policy. At one level, empirical testing could involve estimating the parameters of a fully specified econometric model and then asking whether at a suitable level of significance they fall within the ranges necessary to produce strategic behavior. >Econometrics. There are at least two disadvantages to such an indirect approach. First, it requires the precise specification of a model in terms of parameters and observables, a task of immense complexity and, given our present ignorance, arbitrariness. Second, the circumstances necessary for strategic behavior cannot usually be boiled down to a single parameter, but rather entail the interaction of many parameters and data. The resulting multivariate statistical tests are not only difficult to formulate and interpret, but are also, when confronted with poor data such as trade economists have, prone to be very weak.* >Models, >Economic models, >Model theory. In this paper(2), therefore, I adopt a different, nonparametric, approach. On the basis of verbal reasoning I identify the qualitative changes in trade behavior that would be consistent with strategic responses to import surveillance. >Import surveillance. * In fact, it is actually quite difficult to devise models in which the existence (as opposed to the magnitude) of strategic behavior may be represented parametrically. Certainly the well-known examples of strategic trade models, such as Baldwin and Krugman (1988), presume strategic behavior if markets are not perfectly competitive. 1. Baldwin, R. E. 1989. Taking the calibration out of calibration studies. Columbia University Business School. Mimeograph. 2. L. Alan Winters. „Import Surveillance as a Strategic Trade Policy.“ In: Paul Krugman and Alasdair Smith (Eds.) 1994. Empirical Studies of Strategic Trade Policy. Chicago: The University of Chicago Press. L. Alan Winters. „Import Surveillance as a Strategic Trade Policy.“ In: Paul Krugman and Alasdair Smith (Eds.) 1994. Empirical Studies of Strategic Trade Policy. Chicago: The University of Chicago Press._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Winters, L. Alan EconKrug I Paul Krugman Volkswirtschaftslehre Stuttgart 2017 EconKrug II Paul Krugman Robin Wells Microeconomics New York 2014 Krugman III Paul Krugman Alasdair Smith Empirical Studies of Strategic Trade Policy Chicago: The University of Chicago Press 1994 |
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