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

See all articles by Hui Huang

Hui Huang

Department of Economics, University of Waterloo

John Whalley

University of Western Ontario - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); Centre for International Governance and Innovation (CIGI)

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

Huang, Hui and Whalley, John, The Use of Literature Based Elasticity Estimates in Calibrated Models of Trade-Wage Decompositions: A Calibmetric Approach (December 2003). NBER Working Paper No. w10137, Available at SSRN: https://ssrn.com/abstract=476094

Hui Huang

Department of Economics, University of Waterloo ( email )

Department of Economics
University of Waterloo
Waterloo, Ontario N2L 3G1
Canada

John Whalley (Contact Author)

University of Western Ontario - Department of Economics ( email )

London, Ontario N6A 5B8
Canada
519-661-3509, ext. 83509 (Phone)
519-661-3666 (Fax)

HOME PAGE: http://www.ssc.uwo.ca/economics/faculty/

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CESifo (Center for Economic Studies and Ifo Institute)

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Centre for International Governance and Innovation (CIGI) ( email )

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