Estimating economic relationships subject to firm‐ and time‐varying equality and inequality constraints
企业与时间变化的等式及不等式约束下的经济关系估计
Abstract Applied econometricians often fail to impose economic regularity constraints in the exact form economic theory prescribes. We show how the Singular Value Decomposition (SVD) Theorem and Markov Chain Monte Carlo (MCMC) methods can be used to rigorously impose time‐ and firm‐varying equality and inequality constraints. To illustrate the technique we estimate a system of translog input demand functions subject to all the constraints implied by economic theory,…