A0846
Title: Partial identification of treatment response under complementarity and substitutability
Authors: Edoardo Rainone - Banca d Italia - Dipartimento ECS - Divisione Segreteria (Italy) [presenting]
Abstract: The purpose is to study partial identification of treatment response when the outcome of an agent is affected heterogeneously by the outcomes and, consequently, the treatment statuses of other agents in the economy. When the sign of interactions is predicted by the theory, a general approach is proposed that allows the use of comparative statics under monotonic treatment response. New theoretical results are provided on how the heterogeneous fixed points theorem can be employed to microfound sharp bounds on the distribution of potential outcomes. It is shown with an empirical application that the method can produce narrow and meaningful bounds for the response to central bank funding of credit to the real economy, under full endogeneity of and heterogeneous interdependence among banks' balance sheet items.
