PDF

The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis

Pierre Perron

1989eneconomicstime seriesunit roothypothesis testing

Abstract

Language:

This study investigates the null hypothesis that a time series possesses a unit root with potentially nonzero drift against the alternative hypothesis of a trend-stationary process. The significance of this research lies in its allowance for a one-time change in either the level or the slope of the trend function under both hypotheses. It is demonstrated that conventional tests for the unit root hypothesis cannot reject this hypothesis when the actual data-generating mechanism is stationary fluctuations around a trend function with a one-time break, even under asymptotic conditions. The study further derives test statistics capable of distinguishing between the two hypotheses when a break is present, and establishes their limiting distribution.

Download

Cite This Work

@article{e9a21059-b7b4-4c89-97b8-90a9f4b7cff7,
  title={The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis},
  author={Pierre Perron},
  year={1989},
  language={en}
}
TY  - JOUR
TI  - The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis
AU  - Pierre Perron
PY  - 1989
LA  - en
ER  -

Similar Items

Optimization of Integrated Steel Plant R

This paper addresses the challenge of assessing the feasibility of wind power plant projects at sites with insufficient or no local historic wind data

2025enPDF

Design for Recovery of Precious and Base

2026enPDF

Electrochemical techniques for a cleaner

Important advances in electrochemical engineering technology over the last three decades have fostered the development of a lternative methods to alle

2026enPDF

Environmental and Human Health Risks Ass

2026enPDF

THE FUTURE OF ELECTRONIC WASTE RECYCLING

2026enPDF

The Recovery of Precious and Base Metals

Increasing volumes of waste printed circuit boards from obsolete electronic equipment posed escalating environmental risks and resource losses due to

2026enPDF