Minimal Economy over Worlds
Counterfactuals from Fragmented Evidence
Research question
Which lowest-cost collection of theoretical, measurement, and empirical modules resolves a declared counterfactual to the desired precision?
Abstract
Economic theory, measurement rules, and evidence often describe different parts of one economy. Their intersection can contain many complete economies while placing a counterfactual in a short interval or at one value. A minimal economy over admissible worlds is a lowest-cost module collection that reaches a target resolution. At zero tolerance, target certificates compute the counterfactual from retained modules. In linear economies, certificate support solves least-cost acquisition, residual target rank gives minimum repair, covariance weighting selects the least-variable certificate, and certificate residuals trace an attained approximation frontier. Polyhedral modules yield completion and target certificates from one dual system. A joint confidence region provides target coverage after certificate selection. In the Federal Reserve's 2025 stress-test disclosures, revenue and loss modules carry the sign of cumulative pre-tax income for 20 of 22 banks. Minimum capital ratios additionally require quarterly path information, whose completion interval follows from change bounds and checkpoints.
In one sentence
A collection of records can leave the complete economy unsettled while still determining the policy conclusion that matters.