Econometrics Seminar - Christiane Baumeister (Notre Dame University)

Title: Structural Interpretation of Vector Autoregressions with Incomplete Identification: Setting the Record Straight

Abstract: A recent paper by Kilian and Zhou (2019) mischaracterizes our 2019 paper in American Economic Review and much of the related literature. They misstate our contribution to the literature on identification, mischaracterize the role of prior information about supply elasticity in our analysis, inaccurately describe the relation between structural elasticities and the impacts of shocks, and mischaracterize the literature on supply elasticity. Our purpose in this paper is to set the record straight.