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The Local Projection Residual Bootstrap for AR(1) Models

Amilcar Velez

arXiv 5 Sep 2023 · Econometrics · publishedEconometric Theory (2025)

arXiv:2309.01889 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper proposes a local projection residual bootstrap method to construct confidence intervals for impulse response coefficients of AR(1) models. Our bootstrap method is based on the local projection (LP) approach and involves a residual bootstrap procedure applied to AR(1) models. We present theoretical results for our bootstrap method and proposed confidence intervals. First, we prove the uniform consistency of the LP-residual bootstrap over a large class of AR(1) models that allow for a unit root, conditional heteroskedasticity of unknown form, and martingale difference shocks. Then, we prove the asymptotic validity of our confidence intervals over the same class of AR(1) models. Finally, we show that the LP-residual bootstrap provides asymptotic refinements for confidence intervals on a restricted class of AR(1) models relative to those required for the uniform consistency of our bootstrap.

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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
1Mikusheva, A (2012) One‐Dimensional Inference in Autoregressive Models With the Potential Presence of a Unit Root1.00084100%
2Mikusheva, A (2007) Uniform Inference in Autoregressive Models1.00053100%
3Montiel Olea, J. L. and M. Plagborg-Møller (2021) Local Projection Inference is Simpler and More Robust Than You Think0.98320795%
4Xu, K.-L (2023) Local Projection Based Inference under General Conditions, Tech0.96911491%
5Goncalves, S. and L. Kilian (2004) Bootstrapping autoregressions with conditional heteroskedasticity of unknown form0.92843100%
6Hall, P (1992) The Bootstrap and Edgeworth Expansion0.87472100%
7Horowitz, J. L (2001) The Bootstrap0.87452100%
8Horowitz, J. L (2019) Bootstrap Methods in Econometrics0.87452100%
9Mikusheva, A (2015) Second Order Expansion of the t-statistic in AR (1) Models0.87452100%
10Götze, F. and C. Hipp (1983) Asymptotic expansions for sums of weakly dependent random vectors0.7817271%

Showing the top 10 of 43 scored citations.