We propose a general estimation principle based on the assumption that instrumental variables (IV) do not explain the error term in a structural equation. The estimators based on the principle is inde- pendent of the normalization constraint, unlike the IV estimators.

This study analyzes the size and power of tests of the null of stationarity against the unit root alternative. Existing evidence is limited to processes with roots between 0 and 0.7. In sharp contrast, virtually all applications of economic interest involve null hypotheses much closer to 1. We...