The Use of Literature Based Elasticity Estimates in Calibrated Models of Trade-Wage Decompositions: A Calibmetric Approach
25 Pages Posted: 9 Dec 2003 Last revised: 14 Sep 2022
Date Written: December 2003
Abstract
How to best utilize the wide range of estimates of elasticities that characterize econometric literature when using calibrated models is the issue we address here through a blending of econometrics and calibration into calibmetrics. Econometrically generated literature based elasticity parameters are typically used in calibrated models a very simple manner, appealing to a single value. Here we explicitly incorporate the full range of values of elasticities yielded by econometric studies in both the calibration procedure employed and the uses made of a calibrated model. This is important because the ranges for such values can be large. This allows us to assess how uncertainty in exogenously specified parameter values affects the performance of calibrated models, and how much added information is obtained by using the full range of literature estimates of key parameters in calibration.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
On the Labor Market Effects of Immigration and Trade
By George J. Borjas, Richard B. Freeman, ...
-
Shifts in U.S. Relative Wages: The Role of Trade, Technology and Factor Endowments
By Robert E. Baldwin and Glen G. Cain
-
What are the Results of Product-Price Studies and What Can We Learn from Their Differences?
-
Does the Sector Bias of Skill-Biased Technical Change Explain Changing Wage Inequality?