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Non-standard inference for augmented double autoregressive models with null volatility coefficients

Feiyu Jiang, Dong Li, Ke Zhu

arXiv 6 May 2019 · Econometrics · publishedJournal of Econometrics (2019) · 2 citations (OpenAlex)

arXiv:1905.01798 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper considers an augmented double autoregressive (DAR) model, which allows null volatility coefficients to circumvent the over-parameterization problem in the DAR model. Since the volatility coefficients might be on the boundary, the statistical inference methods based on the Gaussian quasi-maximum likelihood estimation (GQMLE) become non-standard, and their asymptotics require the data to have a finite sixth moment, which narrows applicable scope in studying heavy-tailed data. To overcome this deficiency, this paper develops a systematic statistical inference procedure based on the self-weighted GQMLE for the augmented DAR model. Except for the Lagrange multiplier test statistic, the Wald, quasi-likelihood ratio and portmanteau test statistics are all shown to have non-standard asymptotics. The entire procedure is valid as long as the data is stationary, and its usefulness is illustrated by simulation studies and one real example.

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Pedersen, R.S (2017) Inference and testing on the boundary in extended constant conditional correlation GARCH models1.00063100%
2Ling, S (2007) Self-weighted and local quasi-maximum likelihood estimators for ARMA-GARCH/IGARCH models1.00053100%
3Francq, C., Zakoïan, J.-M (2009) Testing the nullity of GARCH coeffcients: correction of the standard tests and relative effciency comparisons0.9507486%
4Francq, C., Zakoïan, J.-M (2007) Quasi-maximum likelihood estimation in GARCH processes when some coefficients are equal to zero0.8947371%
5Ling, S (2007) A double AR($p$) model: structure and estimation0.8434375%
6Ling, S (2005) Self-weighted least absolute deviation estimation for infinite variance autoregressive models0.81142100%
7Andrews, D.W.K (1999) Estimation when a parameter is on a boundary0.73732100%
8Ling, S (2004) Estimation and testing stationarity for double-autoregressive models0.73732100%
9Zhu, K., Ling, S (2015) LADE-based inference for ARMA models with unspecified and heavy-tailed heteroscedastic noises self0.64422100%
10Jiang, F., Li, D., Zhu, K (2019) Non-standard inference for augmented double autoregressive models with null volatility coefficients self0.5854325%

Showing the top 10 of 72 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
12509.134920.84344
2Adaptive inference for a semiparametric generalized autoregressive conditional heteroskedasticity model0.40511