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Inference in mixed causal and noncausal models with generalized Student's t-distributions

Francesco Giancaterini, Alain Hecq

arXiv 3 Dec 2020 · Econometrics · publishedEconometrics and Statistics (2022)

arXiv:2012.01888 · PDF · DOI · OpenAlex · Extracted main text

Abstract

The properties of Maximum Likelihood estimator in mixed causal and noncausal models with a generalized Student's t error process are reviewed. Several known existing methods are typically not applicable in the heavy-tailed framework. To this end, a new approach to make inference on causal and noncausal parameters in finite sample sizes is proposed. It exploits the empirical variance of the generalized Student's-t, without the existence of population variance. Monte Carlo simulations show a good performance of the new variance construction for fat tail series. Finally, different existing approaches are compared using three empirical applications: the variation of daily COVID-19 deaths in Belgium, the monthly wheat prices, and the monthly inflation rate in Brazil.

Citation extraction

28
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distinct cited
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appendix boundary found by appendix_titled_section at “Appendix A” · 99% of the source is main text. Read the extracted text to check this.

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
1Lanne, M., Saikkonen, P (2011) Noncausal autoregressions for economic time series1.00073100%
2Hecq, A., Lieb, L., Telg, S (2016) Identification of mixed causal-noncausal models in finite samples self1.00054100%
3Andrews, B., Davis, R.A., Breidt, F.J (2006) Maximum likelihood estimation for all-pass time series models0.58531100%
4Rousseeuw, P.J., Croux, C (1993) Alternatives to the median absolute deviation0.58531100%
5Fries, S., Zakoian, J.M (2019) Mixed causal-noncausal ar processes and the modelling of explosive bubbles0.51121100%
6Alessi, L., Barigozzi, M., Capasso, M (2011) Non-fundamentalness in structural econometric models: A review0.40511100%
7Andrews, B., Davis, R.A (2013) Model identification for infinite variance autoregressive processes0.40511100%
8Bec, F., Nielsen, H.B., Sadi, S (2020) Mixed causal–noncausal autoregressions: Bimodality issues in estimation and unit root testing 10.40511100%
9Breidt, F.J., Davis, R.A (1992) Time-reversibility, identifiability and independence of innovations for stationary time series0.40511100%
10Cavaliere, G., Nielsen, H.B., Rahbek, A (2020) Bootstrapping noncausal autoregressions: with applications to explosive bubble modeling0.40511100%

Showing the top 10 of 28 scored citations.

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