2022
DOI: 10.3390/jrfm15060267
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Using Variable Slope Total Derivative Estimations to Pick between and Improve Macro Models

Abstract: Using the same data set, a researcher can obtain very different reduced form estimates just by assuming different macroeconomic models. Reiterative Truncated Projected Least Squares (RTPLS) or Variable Slope Generalized Least Squares (VSGLS) can be used to estimate total derivatives that are not model dependent. These estimates can be used to pick between competing macro models, improve current models, or create new models. A selected survey of RTPLS estimates in the literature reveals several common patterns:… Show more

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“…Second, the US has suffered four recessions during the time period of this analysis: July 1990 to March 1991, March 2001to November 2001, December 2007to June 2009, and February 2020to April 2020 A close look at Figures 3 through 6 reveals that the %d (unemployment rate)/%d (real minimum wages) estimates fell during all of these recessions. Leightner (2022) argues that RTPLS can be used to improve macroeconomic modelling. Likewise, RTPLS can be used to improve the econometrics used in estimating the effects of the minimum wage on unemployment.…”
Section: The Data and Resultsmentioning
confidence: 99%
“…Second, the US has suffered four recessions during the time period of this analysis: July 1990 to March 1991, March 2001to November 2001, December 2007to June 2009, and February 2020to April 2020 A close look at Figures 3 through 6 reveals that the %d (unemployment rate)/%d (real minimum wages) estimates fell during all of these recessions. Leightner (2022) argues that RTPLS can be used to improve macroeconomic modelling. Likewise, RTPLS can be used to improve the econometrics used in estimating the effects of the minimum wage on unemployment.…”
Section: The Data and Resultsmentioning
confidence: 99%