Testing for cointegration in I(1) state space systems via a finite order approximation

C-Tier
Journal: Economics Letters
Year: 2018
Volume: 165
Issue: C
Pages: 73-76

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

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

Abstract

The present paper employs the infinite order error correction representation of the observables of a I(1) state space system and analyzes by simulation the small sample behaviour of the test on rank and on the cointegrating vectors calculated via a finite order cointegrated vector autoregressive approximation. The rank test performs very well in systems with a small number of states and stochastic trends (≤4) and a medium number of observables (≤35) already for a sample of size T=300 and it is still reliable with a large number of observables (≤140) when T=600. The behaviour of the test on the cointegrating vectors is more problematic.

Technical Details

RePEc Handle
repec:eee:ecolet:v:165:y:2018:i:c:p:73-76
Journal Field
General
Author Count
1
Added to Database
2026-01-25