SENSITIVITY ANALYSIS REVISITED - A QUADRATURE-BASED APPROACH

Sensitivity analysis for economic equilibrium models is critical for e stablishing the robustness of model results. A systematic method for p arametric sensitivity analysis based on the Gaussian quadrature proced ure for numerical integration is presented. The approach is compared t o those of Harrison and Vinod and of Pagan and Shannon for the case of a computable general equilibrium model due to Walley and Wigle. The r esults suggest greater efficiency of the Gaussian quadrature approach. (C) Society for Policy Modeling, 1997.