The Craft Of Economic Modeling

Economic Modeling and Inference takes econometrics to a new level by demonstrating how to combine modern economic theory with the latest statistical inference methods to get the most out of economic data. This graduate-level textbook draws applications from both microeconomics and macroeconomics, paying special attention to financial and labor economics, with an emphasis throughout on what observations can tell us about stochastic dynamic models of rational optimizing behavior and equilibrium. Bent Jesper Christensen and Nicholas Kiefer show how parameters often thought estimable in applications are not identified even in simple dynamic programming models, and they investigate the roles of extensions, including measurement error, imperfect control, and random utility shocks for inference. When all implications of optimization and equilibrium are imposed in the empirical procedures, the resulting estimation problems are often nonstandard, with the estimators exhibiting nonregular asymptotic behavior such as short-ranked covariance, superconsistency, and non-Gaussianity. Christensen and Kiefer explore these properties in detail, covering areas including job search models of the labor market, asset pricing, option pricing, marketing, and retirement planning. Ideal for researchers and practitioners as well as students, Economic Modeling and Inference uses real-world data to illustrate how to derive the best results using a combination of theory and cutting-edge econometric techniques. Covers identification and estimation of dynamic programming models Treats sources of error--measurement error, random utility, and imperfect control Features financial applications including asset pricing, option pricing, and optimal hedging Describes labor applications including job search, equilibrium search, and retirement Illustrates the wide applicability of the approach using micro, macro, and marketing examples

Since its establishment in the 1950s the American Economic Association's Committee on Economic Education has sought to promote improved instruction in economics and to facilitate this objective by stimulating research on the teaching of economics. These efforts are most apparent in the sessions on economic education that the Committee organizes at the Association's annual meetings. At these sessions economists interested in economic education have opportunities to present new ideas on teaching and research and also to report the findings of their research. The record of this activity can be found in the Proceedings of the American Eco nomic Review. The Committee on Economic Education and its members have been actively involved in a variety of other projects. In the early 1960s it organized the National Task Force on Economic Education that spurred the development of economics teaching at the precollege level. This in turn led to the development of a standardized research instrument, a high school test of economic understanding. This was followed later in the 1960s by the preparation of a similar test of understanding college economics. The development of these two instruments greatly facilitated research on the impact of economics instruction, opened the way for application of increasingly sophisticated statistical methods in measuring the impact of economic education, and initiated a steady stream of research papers on a subject that previously had not been explored.

Regional economic models are the key to predicting the effects of transportation, economic development, energy, fiscal and environmental policies. Despite this, the principal regional economic policy analysis model used throughout the United States by government agencies, universities, and the private sector has not been presented in a book until now. The approach to building, understanding and using regional models presented in Regional Economic Models: A Systematic Approach to Forecasting and Policy Analysis is progressive. It begins with the simplest possible models and concludes with a full presentation of the leading model used by policy makers today. The full details are presented along with facilitating software, which is made available so that the reader can build a prototype model for any state or country and can perform policy simulations with full operational models for a sample area. Policy studies are discussed that have been carried out with the model, as well as the range of ways in which policies can be tested through policy simulations. The necessary background is developed for understanding the ways in which models can be used to improve the basis upon which policies are evaluated, as well as the sensitivity of the predicted effects to the model chosen for the analysis. The presentation is multifaceted and includes equations, diagrams and numerical examples. The professional literature is integrated with introductory materials to produce the first comprehensive book on regional modeling that extends from economic base models to modeling advances that are currently being published in economic journals.

This book looks 'behind the model' to show how formal models of the economy work - and why they sometimes fail.

"Concern about the role and the limits of modeling has heightened after repeated questions were raised regarding the dependability and suitability of the models that were used in the run-up to the 2008 financial crash. In this book, Lawrence Boland provides an overview of the practices of and the problems faced by model builders to explain the nature of models, the modeling process, and the possibility for and nature of their testing. In a reflective manner, the author raises serious questions about the assumptions and judgments that model builders make in constructing models. In making his case, he examines the traditional microeconomics-macroeconomics separation with regard to how theoretical models are built and used and how they interact, paying particular attention to the use of equilibrium concepts in macroeconomic models and game theory and to the challenges involved in building empirical models, testing models, and using models to test theoretical explanations. Lawrence Boland has been teaching at Simon Fraser University since 1966. He has also taught at the University of Wisconsin-Milwaukee and was a visiting professor in the department of economics at Boston University. At Capilano College and Vancouver Community College, he taught introductorysociology. He is a Fellow of the Royal Society of Canada. Dr. Boland has published six books on economic methodology, including The Foundations of Economic Method: A Popperian Perspective (2003); The Principles of Economics: Some Lies My Teachers Told Me(1992); and The Methodology of Economic Model Building: Methodology after Samuelson (1989)"--