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| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Approximate generalizations and computational experiments |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Econometrica |
| Publisher | Wiley-Blackwell |
| Geographical Reach | international |
| ISSN | 0012-9682 |
| Volume | 75 |
| Number | 4 |
| Page Range | 967 - 992 |
| Date | 2007 |
| Abstract Text | In this paper I demonstrate how one can generalize finitely many examples to statements about (infinite) classes of economic models. If there exist upper bounds on the number of connected components of one-dimensional linear subsets of the set of parameters for which a conjecture is true, one can conclude that it is correct for all parameter values in the class considered, except for a small residual set, once one has verified the conjecture for a predetermined finite set of points. I show how to apply this insight to computational experiments and spell out assumptions on the economic fundamentals that ensure that the necessary bounds on the number of connected components exist. I argue that these methods can be fruitfully utilized in applied general equilibrium analysis. I provide general assumptions on preferences and production sets that ensure that economic conjectures define sets with a bounded number of connected components. Using the theoretical results, I give an example of how one can explore qualitative and quantitative implications of general equilibrium models using computational experiments. Finally, I show how random algorithms can be used for generalizing examples in high-dimensional problems. |
| Official URL | http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0262.2007.00779.x/abstract |
| Digital Object Identifier | 10.1111/j.1468-0262.2007.00779.x |
| Other Identification Number | merlin-id:3498 |
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| Additional Information | The copyright to this article is held by the Econometric Society, http://www.econometricsociety.org/. It may be downloaded, printed and reproduced only for personal or classroom use. Absolutely no downloading or copying may be done for, or on behalf of, any for-profit commercial firm or other commercial purpose without the explicit permission of the Econometric Society. For this purpose, contact Claire Sashi, General Manager, at sashi@econometricsociety.org. |