A Study on Falsifiability of Incompletely Specified Economic Models | Original Article
A general framework is given to analyze the falsifiability of economic models based on a sample of their observable components. It is shown that, when the restrictions implied by the economic theory are insufficient to identify the unknown quantities of the structure, the duality of Specified Models with zero–one cost function delivers interpretable and operational formulations of the theory of specification correctness from which tests can be constructed to falsify the model. This paper study of the situation is such that the solutions of the problem of Some Contributions to the Incompletely Specified Models are necessarily optimized by the same value of . Two sided tests of Specified Models are optimized by roughly the same value of that optimizes the estimation problem. However, tests of Specified Models need not have this property.