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Testing for unit root against stationarity using the likelihood ratio test
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Information Science, Statistics.
2007 (English)In: Communications in statistics. Simulation and computation, ISSN 0361-0918, E-ISSN 1532-4141, Vol. 36, no 2, p. 391-412Article in journal (Refereed) Published
Abstract [en]

In a first order autoregressive model with drift, we derive the likelihood ratio test for a unit root against the stationary alternative. We also derive the test in a state space model with trend. Finite sample and asymptotic critical values are obtained by Monte Carlo simulations. A simulation study investigates the power performance of the likelihood ratio test and we also examine how a bias correction of the test affects the results.

Place, publisher, year, edition, pages
2007. Vol. 36, no 2, p. 391-412
Keywords [en]
unit root, LR test, stationary alternative
National Category
Probability Theory and Statistics
Identifiers
URN: urn:nbn:se:uu:diva-21252DOI: 10.1080/03610910601158401ISI: 000245361200011OAI: oai:DiVA.org:uu-21252DiVA, id: diva2:49025
Available from: 2006-12-18 Created: 2006-12-18 Last updated: 2022-01-28Bibliographically approved

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Larsson, Rolf

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