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Climatic Change

, Volume 101, Issue 3–4, pp 395–405 | Cite as

Does temperature contain a stochastic trend? Evaluating conflicting statistical results

  • Robert K. Kaufmann
  • Heikki Kauppi
  • James H. Stock
Article

Abstract

We evaluate the claim by Gay et al. (Clim Change 94:333–349, 2009) that “surface temperature can be better described as a trend stationary process with a one-time permanent shock” than efforts by Kaufmann et al. (Clim Change 77:249–278, 2006) to model surface temperature as a time series that contains a stochastic trend that is imparted by the time series for radiative forcing. We test this claim by comparing the in-sample forecast generated by the trend stationary model with a one-time permanent shock to the in-sample forecast generated by a cointegration/error correction model that is assumed to be stable over the 1870–2000 sample period. Results indicate that the in-sample forecast generated by the cointegration/error correction model is more accurate than the in-sample forecast generated by the trend stationary model with a one-time permanent shock. Furthermore, Monte Carlo simulations of the cointegration/error correction model generate time series for temperature that are consistent with the trend-stationary-with-a-break result generated by Gay et al. (Clim Change 94:333–349, 2009), while the time series for radiative forcing cannot be modeled as trend stationary with a one-time shock. Based on these results, we argue that modeling surface temperature as a time series that shares a stochastic trend with radiative forcing offers the possibility of greater insights regarding the potential causes of climate change and efforts to slow its progression.

Keywords

Southern Hemisphere Unit Root Temperature Time Series Stochastic Trend Hemisphere Temperature 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media B.V. 2009

Authors and Affiliations

  • Robert K. Kaufmann
    • 1
  • Heikki Kauppi
    • 2
  • James H. Stock
    • 3
  1. 1.Center for Energy & Environmental StudiesBoston UniversityBostonUSA
  2. 2.Department of EconomicsUniversity of HelsinkiArkadiankatu 7Finland
  3. 3.Department of EconomicsHarvard UniversityCambridgeUSA

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