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Robust M-Estimation for Additive Single-Index Cointegrating Time Series Models

Chaohua Dong, Jiti Gao, Yundong Tu, Bin Peng

arXiv 16 Jan 2023 · Econometrics · publishedScientia Sinica Mathematica (2025)

arXiv:2301.06631 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Robust M-estimation uses loss functions, such as least absolute deviation (LAD), quantile loss and Huber's loss, to construct its objective function, in order to for example eschew the impact of outliers, whereas the difficulty in analysing the resultant estimators rests on the nonsmoothness of these losses. Generalized functions have advantages over ordinary functions in several aspects, especially generalized functions possess derivatives of any order. Generalized functions incorporate local integrable functions, the so-called regular generalized functions, while the so-called singular generalized functions (e.g. Dirac delta function) can be obtained as the limits of a sequence of sufficient smooth functions, so-called regular sequence in generalized function context. This makes it possible to use these singular generalized functions through approximation. Nevertheless, a significant contribution of this paper is to establish the convergence rate of regular sequence to nonsmooth loss that answers a call from the relevant literature. For parameter estimation where objective function may be nonsmooth, this paper first shows as a general paradigm that how generalized function approach can be used to tackle the nonsmooth loss functions in Section two using a very simple model. This approach is of general interest and applicability. We further use the approach in robust M-estimation for additive single-index cointegrating time series models; the asymptotic theory is established for the proposed estimators. We evaluate the finite-sample performance of the proposed estimation method and theory by both simulated data and an empirical analysis of predictive regression of stock returns.

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59
references
140
in-text mentions
59
distinct cited
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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
1Phillips, P. C. B (1995) Robust nonstationary regression0.9568588%
2Pollard, D (1991) Asymptotics for the least absolute deviation regression estimators0.9285480%
3Park, J. Y. and Phillips, P. C. B (2001) Nonlinear regression with integreted time series0.8947371%
4Dong, C., Gao, J., and Tjstheim, D (2016) Estimation for single-index and partially linear single-index integrated models self0.88513569%
5Phillips, P. C. B (1991) A shortcut to LAD estimator asymptotics0.81142100%
6Park, J. Y. and Phillips, P. C. B (1999) Asymptotics for nonlinear transformations of integrated time series0.81142100%
7Park, J. Y. and Phillips, P. C. B (2000) Nonstationary binary choice0.7375340%
8Xiao, Z (2009) Quantile cointegrating regression0.73732100%
9Kanwal, R. P (1983) Generalized Fuctions: Theory and Technique0.6597329%
10Tu, Y., Liang, H. Y., and Wang, Q (2022) Nonparametric inference for quantile cointegrations with stationary covariates self0.64441100%

Showing the top 10 of 59 scored citations.