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The Nonlinear Skeletons in the Closet

  • William Barnett

    (Department of Economics, The University of Kansas)

  • Barry E. Jones

    (State University of New York at Binghamton)

  • Milka Kirova

    (Washington University)

  • Travis D. Nesmith

    (Board of Governors of the Federal Reserve System)

  • Meenakshi Pasupathy1

    (Bernard Baruch School - CUNY)

Although nonlinearity is the rule in economic theory, nonlinearity tends to make life difficult for econometricians. While there have been many advances in nonlinear econometrics in recent years, some problems produced by nonlinearity remain 'skeletons in the closet' in empirical economic research. In this paper, we open the door to that closet and take a look at two of the biggest skeletons. For a deeper look into that closet, see the just-published book by W. A. Barnett and Jane Binner (2004), Functional Structure and Approximation in Econometrics, North Holland, Elsevier Science.

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Paper provided by University of Kansas, Department of Economics in its series WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS with number 200403.

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Length: 45 pages
Date of creation: May 2004
Date of revision: May 2004
Handle: RePEc:kan:wpaper:200403
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