Building a structural model: Parameterization and structurality

A specific concept of structural model is used as a background for discussing the structurality of its parameterization. Conditions for a structural model to be also causal are examined. Difficulties and pitfalls arising from the parameterization are analyzed. In particu- lar, pitfalls when considering alternative parameterizations of a same model are shown to have lead to ungrounded conclusions in the lit- erature. Discussion of observationally equivalent models related to different economic mechanisms are used to make clear the connection between an economicall meaningful parameterization and an econom- ically meaningful decomposition of a complex model. The design of economic policy is used for drawing some practical implications of the proposed analysis.