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Analysis of coexplosive processes.

Abstract:
A vector autoregressive model allowing for unit roots as well as an explosive characteristic root is developed. The Granger-Johansen representation shows that this results in processes with two common features: a random walk and an explosively growing process. Cointegrating and coexplosive vectors can be found that eliminate these common factors. The likelihood ratio test for a simple hypothesis on the coexplosive vectors is analyzed. The method is illustrated using data from the extreme Yugoslavian hyperinflation of the 1990s.

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Files:
Publisher copy:
10.1017/S0266466609990144

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Publisher:
Cambridge University Press
Journal:
Econometric theory More from this journal
Volume:
26
Issue:
3
Pages:
882 - 915
Publication date:
2010-01-01
DOI:
ISSN:
0266-4666


Language:
English
UUID:
uuid:5da75753-ffef-4be6-b79e-2edb5206548a
Local pid:
oai:economics.ouls.ox.ac.uk:14854
Deposit date:
2011-08-16

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