Extreme canonical correlations and high-dimensional cointegration analysis

A-Tier
Journal: Journal of Econometrics
Year: 2019
Volume: 212
Issue: 1
Pages: 307-322

Authors (2)

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

We prove that the extreme squared sample canonical correlations between a random walk and its own innovations almost surely converge to the upper and lower boundaries of the support of the Wachter distribution when the sample size and the dimensionality go to infinity proportionally. This result is used to derive previously unknown analytic expressions for the Bartlett-type correction coefficients for Johansen’s trace and maximum eigenvalue tests in a high-dimensional VAR(1). An analysis of cointegration among a large number of log exchange rates illustrates the usefulness of our theoretical results.

Technical Details

RePEc Handle
repec:eee:econom:v:212:y:2019:i:1:p:307-322
Journal Field
Econometrics
Author Count
2
Added to Database
2026-01-26