We show that, in practice, the standard unit root tests, cointegration tests, and similar tests are unreliable. This conclusion is more generally applicable to other regression-based tests. In particular, these tests attempt to solve a problem by creating another problem

We implement the theoretical models of input hedging. In doing so, we provide decisive results regarding the marginal impact of the basis risk on the optimal hedge, hedge ratio and hedge position.

Without imposing restrictions on the utility function and the probability distributions, we show the impact of multiple uncertainty (and each single uncertainty) and change in risk aversion on each input demand. In so doing, we emphasize the importance of the relationship between the inputs in...

When modeling output uncertainty, the multiplicative specification is consistently chosen over the additive form, despite the latter being arguably intuitively more obvious. The rationale for this seems to be that when production risk is the only source of uncertainty, additive uncertainty does...

We show that the increase in price riskiness reduces the optimal output under increasing absolute risk aversion. That is, the marginal impact of the risk on output is independent of the type of absolute risk aversion (decreasing, constant, or increasing).