2023 QE Best Paper Prize Awarded

2023 QE Best Paper Prize Awarded

We are pleased to announce that “Identification and Inference with Ranking Restrictions" by Pooyan Amir-Ahmadi and Thorsten Drautzburg, Quantitative Economics, Volume 12, Number 1 (2021) has been awarded the 2023 QE Best Paper Prize.

Abstract

We propose to add ranking restrictions on impulse-responses to sign restrictions to narrow the identified set in vector autoregressions (VARs). Ranking restrictions come from micro data on heterogeneous industries in VARs, bounds on elasticities, or restrictions on dynamics. Using both a fully Bayesian conditional uniform prior and prior-robust inference, we show that these restrictions help to identify productivity news shocks in the data. In the prior-robust paradigm, ranking restrictions, but not sign restrictions alone, imply that news shocks raise output temporarily, but significantly. This holds both in an application with rankings in the form of heterogeneity restrictions and in another applications with slope restrictions as rankings. Ranking restrictions also narrow bounds on variance decompositions. For example, the bound of the contribution of news shocks to the forecast error variance of output narrows by about 30 pp at the one-year horizon. While misspecification can be a concern with added restrictions, they are consistent with the data in our applications.

The “Best Paper” prize alternates yearly between Quantitative Economics and Theoretical Economics. The single paper winner is selected from all papers published in the corresponding journal during the previous two years by an external committee appointed by the President of the Society, as described in Section 8.5 of the Society’s Rules and Procedures .

Thank you to the 2023 Best Paper Prize committee members Elie Tamer (Chair), Kate Ho, Francesca Molinari, José-Victor Rios-Rull, Jean Marc Robin, and Gianluca Violante for their work on behalf of the Econometric Society.