Economics Dictionary of ArgumentsHome
| |||
|
| |||
| 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. | |||
| Author | Concept | Summary/Quotes | Sources |
|---|---|---|---|
|
Kathleen Hogan on Calibration - Dictionary of Arguments
Calibration/Kala Krishna/Kathleen Hogan/Phillip Swagel: Our work indicates that there is good reason to be suspicious of the results of (…) simple calibration exercises. Indeed, policymakers should be extremely cautious in the application of “optimal” trade policies suggested by calibrated models, as the nature of the recommended policies may simply be an artifact of the model specification and calibration procedure. Since the optimal policy resulting from one model can differ dramatically from that of another model, and since use of the “wrong” policies can actually reduce welfare, it is important to specify a flexible form which does not dictate the direction of the results. Even if the optimal policies are found and implemented, the gains from doing so are relatively limited, even without foreign retaliation. Krugman III 14 This result, that only fairly small welfare gains are to be had from optimal tariffs and subsidies, seems common to many such models. Calibration models should thus probably not be used to determine trade and industrial policy without detailed empirical work to guide the model selection. Sufficiently well specified, however, they prove to be a valuable tool in the analysis of imperfectly competitive industries, since many important results are not sensitive to model specification. Guidance from careful empirical work as to the correct demand and cost parametrizations to use in such calibration models is vital for them to serve as useful guides to determine trade policy. >International trade/Kala Krishna, >New trade theory. Kala Krishna, Kathleen Hogan, and Phillip Swagel. „The Nonoptimality of Optimal Trade Policies: The U.S. Automobile Industry Revisited, 1979-1985.“ 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. |
Hogan, Kathleen 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 |
||
Authors A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Concepts A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
