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Evaluation of Dutch Election Programs. The Impact of Parameter Uncertainty

Author

Listed:
  • J. Knoben
  • M. Kerkhofs
  • J. Graafland

Abstract

Shortly before the national elections in the Netherlands, the Netherlands Bureau for Economic Policy Analysis (CPB) evaluates the economic effects of the policy proposals in election programs. This paper investigates the sensitivity of this analysis to the uncertainty of parameter estimates in the economic models that are used. For this purpose, a Monte Carlo analysis of five election programs is performed, using a core version of one of the CPB models. It can be concluded that the range of projected outcomes is surprisingly small. Nonetheless, caution remains needed, especially when the estimated effects of different parties are roughly similar.

Suggested Citation

  • J. Knoben & M. Kerkhofs & J. Graafland, 2006. "Evaluation of Dutch Election Programs. The Impact of Parameter Uncertainty," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(1), pages 47-74.
    • Handle: RePEc:ete:revbec:20060103
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    References listed on IDEAS

    as
    1. Bovenberg, A. Lans & Graafland, Johan J. & de Mooij, Ruud A., 2000. "Tax reform and the Dutch labor market: an applied general equilibrium approach," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 193-214, October.
    2. Donders, Jan & Graafland, Johan, 1998. "CPB models and employment policy in the Netherlands," Economic Modelling, Elsevier, vol. 15(3), pages 341-356, July.
    3. Francis X. Diebold, 1998. "The Past, Present, and Future of Macroeconomic Forecasting," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 175-192, Spring.
    4. Graafland, J.J. & Huizinga, F.H., 1998. "Taxes and benefits in a non-linear wage equation," MPRA Paper 21076, University Library of Munich, Germany.
    5. Draper, D.A.G., 2000. "Towards an econometric model for the Netherlands : Explaining unemployment," Other publications TiSEM 8d6f0572-d552-4ca2-9df3-6, Tilburg University, School of Economics and Management.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Parameter uncertainty; policy evaluation; general equilibrium models; election programs;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications

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