Reduced-form models

Reduced-form models are simplified representations used in various fields, such as economics and statistics, to analyze relationships between variables without delving into the underlying complexities. Instead of focusing on the specific mechanisms or causes behind these relationships, reduced-form models highlight the overall patterns and effects. This approach often employs statistical techniques to capture the essential features, making it easier to interpret outcomes and make predictions. By summarizing information, reduced-form models help researchers and decision-makers understand how different factors interact in a clear and efficient manner.