Testing for stationarity in heterogeneous panel data in the presence of cross-section dependence

Monica Giulietti, Jesús Otero, Jeremy Smith*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

The panel variant of the KPSS tests developed by Hadri [Hadri, K., 2000, Testing for stationarity in heterogeneous panels. Econometrics Journal, 3, 148-161] for the null of stationarity suffers from size distortions in the presence of cross-section dependence. However, applying the bootstrap methodology, we find that these tests are approximately correctly sized.

Original languageEnglish
Pages (from-to)195-203
Number of pages9
JournalJournal of Statistical Computation and Simulation
Volume79
Issue number2
Early online date5 Dec 2008
DOIs
Publication statusPublished - 2009

Keywords

  • bootstrap
  • cross-section dependence
  • heterogeneous dynamic panels
  • Monte Carlo
  • unit root tests

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