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A Unified Frequency Domain Cross-Validatory Approach to HAC Standard Error Estimation

Zhihao Xu, Clifford M. Hurvich

arXiv 13 Aug 2021 · Econometrics · publishedEconometrics and Statistics (2023)

arXiv:2108.06093 · PDF · DOI · OpenAlex · Extracted main text

Abstract

A unified frequency domain cross-validation (FDCV) method is proposed to obtain a heteroskedasticity and autocorrelation consistent (HAC) standard error. This method enables model/tuning parameter selection across both parametric and nonparametric spectral estimators simultaneously. The candidate class for this approach consists of restricted maximum likelihood-based (REML) autoregressive spectral estimators and lag-weights estimators with the Parzen kernel. Additionally, an efficient technique for computing the REML estimators of autoregressive models is provided. Through simulations, the reliability of the FDCV method is demonstrated, comparing favorably with popular HAC estimators such as Andrews-Monahan and Newey-West.

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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
1Andrews, D. W (1991) Heteroskedasticity and autocorrelation consistent covariance matrix estimation1.000104100%
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4Newey, W. K. and K. D. West (1994) Automatic lag selection in covariance matrix estimation1.00074100%
5Beltrao, K. and P. Bloomfield (1987) Determining the bandwidth of a kernel spectrum estimate0.92843100%
6Den Haan, W. J. and A. Levin (1997) A practitioner's guide to robust covariance matrix estimation0.87462100%
7Newey, W. K. and K. D. West (1987) A simple, positive semi-definite, heteroskedasticity and autocorrelation consistent covariance matrix0.84333100%
8Wahba, G. and S. Wold (1975) Periodic splines for spectral density estimation: The use of cross validation for determining the degree of smoothing0.73732100%
9Cheang, W.-K. and G. C. Reinsel (2000) Bias reduction of autoregressive estimates in time series regression model through restricted maximum likelihood0.64422100%
10Chen, W. W. and R. S. Deo (2012) The restricted likelihood ratio test for autoregressive processes0.64422100%

Showing the top 10 of 35 scored citations.