What Have We Learned from Structural Models?
American Economic Review
vol. 107,
no. 5, May 2017
(pp. 287-92)
Abstract
A structural economic model is one where the structure of decision making is incorporated in the model specification. Structural models aim to identify three distinct, but related, objects: (i) structural "deep" parameters; (ii) underlying mechanisms; (iii) policy counterfactuals. The ability to provide counterfactual predictions sets structural models apart from reduced-form models. The focus is on studies that allow a better understanding of the mechanisms underlying observed behavior and that provide reliable insights about policy counterfactuals. Emphasis is given to models that minimize assumptions on the structural function and on unobserved heterogeneity and approaches that align structural and "reduced form" moments.Citation
Blundell, Richard. 2017. "What Have We Learned from Structural Models?" American Economic Review, 107 (5): 287-92. DOI: 10.1257/aer.p20171116Additional Materials
JEL Classification
- C20 Single Equation Models; Single Variables: General
- C50 Econometric Modeling: General