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Some New Tests for a Change in Persistence

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Author Info
Robert Taylor () (Department of Economics, University of Birmingham)
Stephen Leybourne () (Department of Economics, University of Nottingham)

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Abstract

In this paper we develop new persistence change tests, similar in spirit to those of Kim (2000), Kim et al. (2002) and Busetti and Taylor (2004). While the exisiting tests are based on the maximum over an appropriate sequence of ratios of sub-sample stationarity statistics, our proposed tests are based on the maximum of the sequence of the numerators of these ratios divided by the minimum of the sequence of the denominators of the ratios. The large sample properties of the tests are established, and both finite sample and asymptotic critical values are provided. Numerical evidence suggests that our proposed tests provide a useful complement to the extant tests.

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Publisher Info
Article provided by Economics Bulletin in its journal Economics Bulletin.

Volume (Year): 3 (2004)
Issue (Month): 39 ()
Pages: 1-10
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Handle: RePEc:ebl:ecbull:v:3:y:2004:i:39:p:1-10

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Related research
Keywords: Brownian motion Persistence change sub-sample stationarity tests

Find related papers by JEL classification:
C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

References listed on IDEAS
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  1. Phillips, P.C.B., 1986. "Testing for a Unit Root in Time Series Regression," Cahiers de recherche 8633, Universite de Montreal, Departement de sciences economiques.
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  2. Leybourne, Stephen & Taylor, A. M. Robert, 2004. "On tests for changes in persistence," Economics Letters, Elsevier, vol. 84(1), pages 107-115, July. [Downloadable!] (restricted)
  3. Kim, Jae-Young, 2000. "Detection of change in persistence of a linear time series," Journal of Econometrics, Elsevier, vol. 95(1), pages 97-116, March. [Downloadable!] (restricted)
  4. Busetti, Fabio & Taylor, A. M. Robert, 2004. "Tests of stationarity against a change in persistence," Journal of Econometrics, Elsevier, vol. 123(1), pages 33-66, November. [Downloadable!] (restricted)
  5. Kim, Jae-Young & Belaire-Franch, Jorge & Amador, Rosa Badillo, 2002. "Corrigendum to "Detection of change in persistence of a linear time series" [J. Econom. 95 (2000) 97-116]," Journal of Econometrics, Elsevier, vol. 109(2), pages 389-392, August. [Downloadable!] (restricted)
  6. Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178. [Downloadable!] (restricted)
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