My final question, I hope you can understand it.
If all the values of the endogenous variables are staitc in an economics model,does it imply that testable implications must be able to be generated?
If not, can you raise some economic model (in which all the values of the endogenous variables are staitc) fail to generate testable implications?
thx very much!
I have actually seen someone postulate an untestable economic model. It was untestable because one of the exogenous variables was unmeasurable. (And so, it was a ridiculus model). The model was something like peace in the middle east was a function of the number of people, worldwide, praying for peace.
So, yes, I believe one could concoct an untestable economic model. It would require that the exogenous variables be unmeasurable.
For more info, see:
http://www.bized.co.uk/educators/he/spreadsheet/section_1.htm
Yes, I can understand your question. In an economics model, if all the values of the endogenous variables are static, it does not necessarily imply that testable implications must be able to be generated.
An economic model consists of equations that explain how different variables interact with each other. The endogenous variables are the variables that are determined within the model. If these endogenous variables have static values, it means that they are fixed and do not change over time or in response to other variables.
To generate testable implications, we need variables that can vary or change in response to different conditions. If all the endogenous variables in a model have static values, it implies that these variables are not influenced by any other variable in the model or external factors. In such a scenario, there may not be any testable implications because there are no variables or relationships that can be observed or measured.
However, it's important to note that the absence of testable implications does not necessarily mean that the model is invalid or useless. Sometimes, economists use static models to analyze equilibrium situations or to study long-term relationships. These models may not generate testable implications but can still provide valuable insights and understanding of certain economic phenomena.
In summary, if all the values of the endogenous variables are static in an economic model, it does not guarantee that testable implications can be generated. Testable implications require variables that can vary or change in response to different conditions, which may not be present in a model with static endogenous variables. Nonetheless, such models can still provide valuable insights and understanding in specific contexts.