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TESTS FOR FRACTIONAL INTEGRATION: A MONTE CARLO INVESTIGATION

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

Abstract

Abstract. The performance of the Geweke‐Porter‐Hudak (GPH) test, the modified rescaled range (MRR) test and two Lagrange multiplier (LM) type tests for fractional integration in small samples is examined using Monte Carlo methods. Both the GPH and MRR tests are found to be robust to moderate autoregressive moving‐average components, autoregressive conditional heteroskedasticity effects and shifts in the variance. However, these two tests are sensitive to large autoregressive moving‐average components and shifts in the mean. It is also found that the LM tests are sensitive to deviations from the null hypothesis. As an illustration, the GPH test is applied to two economic data series. Copyright © 1993, Wiley Blackwell. All rights reserved
Original languageEnglish
Pages (from-to)331-345
JournalJournal of Time Series Analysis
Volume14
Issue number4
DOIs
Publication statusPublished - Jul 1993
Externally publishedYes

Research Keywords

  • ARCH
  • ARMA
  • Monte Carlo experiment
  • shifts in parameters
  • Tests for fractional integration

Policy Impact

  • Cited in Policy Documents

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