Frankenstein Empirical dynamics: patching clamped results #111
hyunjimoon
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How can real data from the suboptimal world be used in the policy prescription model which suggests SHOULD i.e. non-real?
According to Tom, the situation where equilibrium is assumed so every action cannot fight against
do nothing
option is very common in Econ and climate models. However Frankenstein-like the result may be, patching up clamped outcomes from partial calibration is the best bet.This is another example of "Interlocked dynamic and temporal aggregation". Capital stock in the econ model (dollar value of building which can be disaggregated by age and energy performance) is perceived as equilibrium due to its relatively long time horizon. In time series forecasting, yearly seasonality is less sensitive to new data compared to daily seasonality.
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