There are a large number of tests for instability or breaks in coefficients in regression models designed for different possible departures from a stable regression. We make two contributions to this literature. First, we provide conditions under which optimal tests are asymptotically...

Present value calculations require predictions of cash flows both at near and distant future points in time. Such predictions are generally surrounded by considerable uncertainty and may critically depend on assumptions about parameter values as well as the form and stability of the data...