This paper examines the Pfann and Verspagen specification for asymmetric adjustment cost. We show that under asymmetry, the coefficient for the linear-quadratic term understates the symmetric part of adjustment cost. The analysis reveals that a positive value for this parameter is sufficient but...

In this paper we propose a unified framework for testing weak separability. We present a new three-step procedure, which is a joint test of necessary and sufficient conditions that takes account of possible measurement error and incomplete adjustment. We illustrate the operational capability of...