What does the saving-investment (SI) relation really measure and how should the SI relation be measured? These are two of the most discussed issues triggered by the so-called Feldstein-Horioka puzzle. Based on panel data we introduce a new variant of functional coefficient models that allows to...

First generation panel unit root tests are known to be invalid under cross sectional dependence. Focussing on the subclass of homogenous tests, three extensions of existing approaches are proposed. First, a test based on a generalized variance estimator is suggested for panels with small time...

To infer on functional dependence of regression parameters, a new, factor based bootstrap approach is introduced, that is robust under various forms of heteroskedastic error terms. Modeling the functional coefficient parametrically, the bootstrap approximation of an F-statistic is shown to hold...