Collaborative Research on Applied Equilibrium with          Increasing Returns:  A Non Parametric Approach
{'Code': '04050100', 'Directorate': {'Abbreviation': 'SBE', 'LongName': 'Direct For Social, Behav & Economic Scie'}, 'Division': {'Abbreviation': 'SES', 'LongName': 'Divn Of Social and Economic Sciences'}}
{'SignBlockName': 'Daniel H. Newlon', 'PO_EMAI': None, 'PO_PHON': None}
Applied general equilibrium models are becoming the primary  method             for analyzing the interrelations among households, firms, governmental          policy, and the international economy.  At present there exist two              main methods of specifying general equilibrium models before                    equilibrium values are computed.  These are econometric specification           and calibration.  Both methods have certain shortcomings, particularly          in empirical application where there are errors in measurement.  The            work done in this project will overcome those difficulties by using a           non-parametric approach in specifying the general equilibrium model.                                                                                            This project avoids the difficulties associated with the econometric            and calibration methods by making no assumptions about the form,                either distributional or exact value, of the errors.  Rather, a set of          necessary conditions is derived for testing whether a given set of              data could have been generated by market participants acting under the          usual behavioral assumptions.  That is, the firms maximize profit, and          the consumers maximize utility.  Tests for the existence of utility             functions are derived, and applied to the empirical data.                                                                                                       This project is done in collaboration with Professor Donald Brown of            Stanford University.                                                            %%%                                                                             During the past several decades various methods for analyzing the               economy in its entirety have been developed.  Input-output analysis,            linear programming, and activity analysis have been the mainstays for           modeling all the interrelationships (firms, consumers, and government)          in an economy, and estimating values at which the economy will reach            equilibrium.  These methods have increasingly given way to a more               fundamental methodology which actively incorporates the behavioral              assumptions underlying the activities of the individual market                  participants.  That is, the consumers are assumed to maximize utility           according to a parametric specification of a mathematical function              with known properties.  Likewise, firms are assumed to maximize profit          according to a mathematical function.                                                                                                                           The difficulty with this parametric approach is that very strong                assumptions must be made about the values or distribution of errors             occuring in empirical data.  This project overcomes that difficulty by          deriving a set of necessary conditions to be applied to a set of                observed empirical data to test whether those data could have been              generated by a model with the assumed behavioral properties.                    Therefore, this non-parametric approach avoids the maintained                   hypothesis of parametric specification for the behavior of the market           participants.   These non-parametric tests provide a fundamental                theoretical basis for further parametric analysis.                                                                                                              This project is done in collaboration with Professor Donald Brown of            Stanford University.
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{'Name': 'Yale University', 'CityName': 'NEW HAVEN', 'ZipCode': '065113572', 'PhoneNumber': '2037854689', 'StreetAddress': '150 MUNSON ST', 'StreetAddress2': None, 'CountryName': 'United States', 'StateName': 'Connecticut', 'StateCode': 'CT', 'CONGRESSDISTRICT': '03', 'CONGRESS_DISTRICT_ORG': 'CT03', 'ORG_UEI_NUM': 'FL6GV84CKN57', 'ORG_LGL_BUS_NAME': 'YALE UNIV', 'ORG_PRNT_UEI_NUM': 'FL6GV84CKN57'}
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{'Code': '1320', 'Text': 'Economics'}
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