26
Dic
11

Heuristic optimisation in economics and econometrics | vox – Research-based policy analysis and commentary from leading economists

Via Scoop.itBounded Rationality and Beyond

Economics has a long tradition of relying on quantitative models for both presenting its theory and testing it empirically. In fact, Joseph Schumpeter, in the first edition of Econometrica in 1933, described economics as the most quantitative of all sciences. Optimisation is an inherent part of this methodology. In theoretical models, agents are presented as utility maximisers and firms try to maximise profit or to minimise cost. Selecting and estimating models for given data sets amounts to optimisation as well – sums of squares are minimised and likelihoods are maximised so routinely today that often researchers may not even be aware that fitting a model means optimising it.
When building models, economists are often limited by the fact that the model later needs to be solved, ideally in a closed-form. Some researchers have abandoned relying on “representative agents” and opted for more complex models, relying on computer simulations to obtain results. Such agent-based models, if they are to be a viable alternative to more standard approaches, need to be “tuned” such that the results from these models coincide with empirical facts. This, again, is an estimation – and hence optimisation – problem. In this column, we will primarily discuss estimation problems in econometrics, but the problem is much more general and applies to many areas in economics (see Winker (2001), chapter 2).
Via voxeu.org

Annunci

0 Responses to “Heuristic optimisation in economics and econometrics | vox – Research-based policy analysis and commentary from leading economists”



  1. Lascia un commento

Rispondi

Inserisci i tuoi dati qui sotto o clicca su un'icona per effettuare l'accesso:

Logo WordPress.com

Stai commentando usando il tuo account WordPress.com. Chiudi sessione /  Modifica )

Google photo

Stai commentando usando il tuo account Google. Chiudi sessione /  Modifica )

Foto Twitter

Stai commentando usando il tuo account Twitter. Chiudi sessione /  Modifica )

Foto di Facebook

Stai commentando usando il tuo account Facebook. Chiudi sessione /  Modifica )

Connessione a %s...

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Time is real? I think not

dicembre: 2011
L M M G V S D
« Nov   Gen »
 1234
567891011
12131415161718
19202122232425
262728293031  

Commenti recenti

Lorenzo Bosio su Un testo che trascende le sue…

Inserisci il tuo indirizzo e-mail per iscriverti a questo blog e ricevere notifiche di nuovi messaggi per e-mail.

Segui assieme ad altri 1.040 follower

Latest Tweets

Annunci

%d blogger hanno fatto clic su Mi Piace per questo: