It is shown that the limiting distribution of the augmented Dickey-Fuller (ADF) test under the null hypothesis of a unit root is valid under a very general set of assumptions that goes far beyond the linear AR (∞) process assumption typically imposed. In essence, all that is required is...

This paper examines a class of contractual relationships with specific investment, a non-durable trading opportunity, and renegotiation. Trade actions are modeled as individual and trade-action-based option contracts (“non-forcing contractsâ€) are explored. The paper identifies an...

This paper develops a New Trade Theory model modified with entry barriers, thereby creating a link between the traditional interests of development and industrial organization economists and research on international trade. I show that entry barriers cause the market size to become endogenous by...

Fixed effects estimators in nonlinear panel models with fixed and short time series length T usually suffer from inconsistency because of the incidental parameters problem first noted by Neyman and Scott (1948). Moreover, even if T grows but at a rate not faster than the cross sectional sample...

While economists have long been interested in effects of health and human capital on productivity, less attention has been paid to the influence of time use. We investigate the productivity effects of the single largest use of time--sleep. Because sleep influences performance on memory...

Recent work in econometrics has provided large bandwidth asymptotic theory for taper-based studentized estimates of the mean, in the context of nonparametric estimation for serially correlated time series data. These taper-based statistics can be viewed as estimates of the spectral density at...

We evaluate whether driving restrictions improve air quality.  While Milan's restriction decreases overall air pollution, there is a significant behavioral response that attenuates the effect.  Our study expoits the natural experiment created by an unanticipated court injunction suspending...