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It is now well known that standard asymptotic inference techniques for instrumental variable estimation perform very poorly in the presence of weak instruments. Specifically, standard asymptotic techniques give spuriously small standard errors, leading investigators to accept apparently tight...
Persistent link: https://www.econbiz.de/10005699389
Two widely used methods of decomposing GDP into trend and cycle yield starkly different results. The unobserved component approach implies smooth trend with large, persistent cycle. In contrast, the Beveridge and Nelson (1981) approach implies most of the variation is attributable to trend. This...
Persistent link: https://www.econbiz.de/10005699559
We investigate the nature of asymmetries in U.S. business cycle dynamics using a dynamic two-factor model of output, investment, and consumption that incorporates both the common stochastic trend implied by neoclassical growth theory and a common transitory component. This framework allows for...
Persistent link: https://www.econbiz.de/10005231105