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- Title
THE GRAVITY MODEL: AN ILLUSTRATION OF STRUCTURAL ESTIMATION AS CALIBRATION.
- Authors
BALISTRERI, EDWARD J.; HILLBERRY, RUSSELL H.
- Abstract
Dawkins, Srinivasan, and Whalley (“Calibration,”Handbook of Econometrics, 2001) propose that estimation is calibration. We illustrate their point by examining a leading econometric application in the study of international and interregional trade by Anderson and van Wincoop (“Gravity with Gravitas: A Solution to the Border Puzzle,”American Economic Review, 2003). We replicate the econometric process and show it to be a calibration of a general equilibrium model. Our approach offers unique insights into structural estimation, and we highlight the importance of traditional calibration considerations when one uses econometric techniques to calibrate a model for comparative policy analysis. ( JEL F10, C13, C60)
- Subjects
ECONOMETRICS; INTERNATIONAL trade; ECONOMIC equilibrium; CALIBRATION; ECONOMIC models; POLICY analysis
- Publication
Economic Inquiry, 2008, Vol 46, Issue 4, p511
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/j.1465-7295.2007.00093.x