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As is well known in systems theory, the parameter space of most dynamic models is stratified into subsets, each of which supports a different kind of dynamic solution. Since we do not know the parameters with certainty, knowledge of the location of the bifurcation boundaries is of fundamental...
Persistent link: https://www.econbiz.de/10012720231
This paper denies that the demand for money function is any more unstable than other demand functions and maintains that the controversies regarding unstable money demand are produce by poor methodology that is not shared by other areas of the field of economics, when investigating demand...
Persistent link: https://www.econbiz.de/10012768106
Theoretical constraints on economic-model parameters often are in the form of inequality restrictions. For example, many theoretical results are in the form of monotonicity or nonnegativity restrictions. Inequality constraints can truncate sampling distributions of parameter estimators, so that...
Persistent link: https://www.econbiz.de/10004961522
Among the many demand specifications in the literature, the Rotterdam model and the Almost Ideal Demand System (AIDS) have particularly long histories, have been highly developed, and are often applied in consumer demand systems modeling. Using Monte Carlo techniques, we seek to determine which...
Persistent link: https://www.econbiz.de/10005621245
The Rotterdam model and the Almost Ideal Demand System (AIDS) are often applied in consumer demand systems modeling. Using Monte Carlo techniques, we determine which model performs best in recovering the true elasticities of demand. The AIDS model is usually used in linearized form. Since the...
Persistent link: https://www.econbiz.de/10005241866
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Using Hansen's (1999) threshold estimation technique and Panel Study of Income Dynamics (PSID) data set for the waves of 2001, 2003 and 2005, we estimate the effects of the fluctuations in financial wealth on the consumption behaviour of households for different endogenously determined income...
Persistent link: https://www.econbiz.de/10009277462
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