Empirical Observations

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August 31, 2024 4 min read Definitions

Calibration: Identification of Numerical Values in Economic Models

Economics Statistics Economic Models Business Cycles Model Simulation Empirical Observations Parameter Tuning

Calibration is the process of identifying numerical values for parameters in an economic model by combining empirical data, informed judgement, simulation, and fine-tuning to match model predictions with empirical observations. This procedure is crucial in assessing business cycle models.

August 31, 2024 4 min read Definitions

Stylized Facts: Empirical Observations in Economic Theory

Economics Statistics Empirical Observations Economic Theories Data Analysis Macroeconomics Modeling

Stylized facts are empirical observations used as a starting point for the construction of economic theories. These facts hold true in general, but not necessarily in every individual case. They help in simplifying complex realities to develop meaningful economic models.