A note on tests of partial parameter stability in the cointegrated system

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Abstract

This paper provides a local asymptotic analysis to show that the tests of partial parameter stability in cointegrating regressions, such as Quintos and Phillips [Quintos, C.E., Phillips, P.C.B., 1993. Parameter constancy in cointegrating regressions, Empirical Economics 18, 675-703] and Kuo [Kuo, B.S., 1998. Test for partial parameter instability in regressions with I(1) processes, Journal of Econometrics 86, 337-368], are not pivotal as long as there are changes in parameters not being tested.

Original languageEnglish
Pages (from-to)500-503
Number of pages4
JournalEconomics Letters
Volume99
Issue number3
DOIs
StatePublished - Jun 2008

Keywords

  • Cointegration
  • Local power analysis
  • Partial parameter stability

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