Optimal two-sided tests for instrumental variables regression with heteroskedastic and autocorrelated errors

A-Tier
Journal: Journal of Econometrics
Year: 2019
Volume: 213
Issue: 2
Pages: 398-433

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper considers two-sided tests for the parameter of an endogenous variable in an instrumental variable (IV) model with heteroskedastic and autocorrelated errors. We develop the finite-sample theory of weighted-average power (WAP) tests with normal errors and a known long-run variance. A typical weight choice yields tests with power near zero for parts of the parameter space.

Technical Details

RePEc Handle
repec:eee:econom:v:213:y:2019:i:2:p:398-433
Journal Field
Econometrics
Author Count
2
Added to Database
2026-01-26