It is common in applied econometrics to test the null hypothesis of a level-stationary process against the alternative of a unit root process. We show that the use of conventional asymptotic critical values for the stationarity tests of Kwiatkowski et al. (1992) and Leybourne and McCabe (1994)...

Instrumental variable methods are widely used to make inferences about the impact of some variable on economic outcomes; for example, whether or not institutions influence long term growth. However, the test-statistics used for making these inferences are based on the generally unrealistic...