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SUMMARY:Equilibrium Counterfactuals
DTSTART:20190701T103000
DTEND:20190701T113000
DTSTAMP:20260407T194855Z
UID:1cc150fdcdedd36b1c922dfa2a983db2b6376f58e407e05fe654a9bb
CATEGORIES:Conferences - Seminars
DESCRIPTION:Gilles CHEMLA\, Imperial College\nThe objective of applied str
 uctural microeconometrics is to identify policy-invariant parameters so al
 ternative policies can be assessed. However\, the common practice of treat
 ing policy changes as zero probability exogenous "counterfactuals" violate
 s rational expectations: Agents understand policy changes are  positive p
 robability endogenous events which the structural estimation is intended t
 o inform. We analytically characterize implications for moment-based param
 eter inference. As shown\, if policy change is optimal\, inference is bias
 ed. Further\, the traditional structural identi…cation assumption\, const
 ant partial derivative sign\, is neither necessary nor sufficient with pol
 icy control. We offer an alternative identifying assumption: constant tota
 l derivative sign accounting for inference-policy feedback. Under this ass
 umption\, rational expectations can be imposed computationally (algorithmi
 cally) to generate unbiased inference and implement …first-best. The quan
 titative importance of these e¤ects in applied settings is illustrated by
  calibrating the Leland (1994) model to the Tax Cuts and Jobs Act of 2017.
LOCATION:UNIL\, Extranef\, room 118 https://planete.unil.ch/plan/?local=EX
 T-118.1
STATUS:CONFIRMED
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