Lind, Jo Thori; Mehlum, Halvor - In: Oxford Bulletin of Economics and Statistics 72 (2010) 1, pp. 109-118
Nonlinear relationships are common in economic theory, and such relationships are also frequently tested empirically. We argue that the usual test of nonlinear relationships is flawed and derive the appropriate test for a U-shaped relationship. Our test gives the exact necessary and sufficient...