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Robust Minimum Distance Inference in Structural Models

Joan Alegre, Juan Carlos Escanciano

arXiv 9 Oct 2023 · Econometrics

arXiv:2310.05761 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper proposes minimum distance inference for a structural parameter of interest, which is robust to the lack of identification of other structural nuisance parameters. Some choices of the weighting matrix lead to asymptotic chi-squared distributions with degrees of freedom that can be consistently estimated from the data, even under partial identification. In any case, knowledge of the level of under-identification is not required. We study the power of our robust test. Several examples show the wide applicability of the procedure and a Monte Carlo investigates its finite sample performance. Our identification-robust inference method can be applied to make inferences on both calibrated (fixed) parameters and any other structural parameter of interest. We illustrate the method's usefulness by applying it to a structural model on the non-neutrality of monetary policy, as in \cite{nakamura2018high}, where we empirically evaluate the validity of the calibrated parameters and we carry out robust inference on the slope of the Phillips curve and the information effect.

Citation extraction

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Nakamura, Emi and Jón Steinsson (2018) High-frequency identification of monetary non-neutrality: the information effect1.000154100%
2Pesendorfer, Martin and Philipp Schmidt-Dengler (2008) Asymptotic least squares estimators for dynamic games1.00073100%
3Dufour, Jean-Marie and Pascale Valéry (2016) Rank-robust Wald-type tests: a regularization approach, Tech0.73732100%
4Stewart, GW (1969) On the continuity of the generalized inverse0.73732100%
5Robin, Jean-Marc and Richard J Smith (2000) Tests of rank0.6443267%
6Amato, Jeffery D and Thomas Laubach (2003) Estimation and control of an optimization-based model with sticky prices and wages0.64422100%
7Christiano, Lawrence J, Martin Eichenbaum, and Charles L Evans (2005) Nominal rigidities and the dynamic effects of a shock to monetary policy0.64422100%
8Kleibergen, Frank (2005) Testing parameters in GMM without assuming that they are identified0.64422100%
9Lee, Adam (2022) Robust and efficient inference for non-regular semiparametric models, Tech0.64422100%
10McFadden, Daniel (1989) A method of simulated moments for estimation of discrete response models without numerical integration0.64422100%

Showing the top 10 of 54 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Choosing What to Calibrate and What to Estimate in Structural Models0.64422