There has so far been no shared understanding of validity in agent-based simulation. We here conceptualise validation as systematically substantiating the premises on which conclusions from simulation analysis for a particular modelling context are built. Given such a systematic perspective,...

Labour‐saving technologies are relevant for agricultural development. Yet, as this study shows, they are poorly integrated into agricultural production functions of economy‐wide models. We report a computable general equilibrium (CGE) model, which explicitly incorporating field operations...

The Prediction Accuracy Index (PAI) monitors stability, defined as whether the predictive power of a model has deteriorated due to a change in the distribution of the explanatory variables since its development. This paper shows how the PAI is related to the Mahalanobis distance, an established...

The primary objective of this paper is to revisit DSGE models with a view to bringing out their key weaknesses, including statistical misspecification, non-identification of deep parameters, substantive inadequacy, weak forecasting performance, and potentially misleading policy analysis. It is...

Conditional on a contractionary monetary policy shock, the labor share of value added is expected to decrease in the basic New Keynesian model. By providing firm-level evidence, we are first to validate this proposition. Using local projections and high dimensional fixed effects, we show that a...