Abstract
This paper investigates the impact of different depreciation methods on the dynamic characteristics of the Greek regional net fixed capital series. Using annual data over the period from 1974 to 2006, Karpetis and Zikos (Int J Econ Res 11(2):333–354, 2014) constructed the series of nominal net fixed capital in the case of the thirteen administrative regions of Greece, applying four different depreciation methods of capital. In the context of the present analysis, these series were initially deflated, using the country’s G.D.P. deflator (2005 = 100), and subsequently were exploited to investigate their dynamic characteristics through estimation of the best fitted ARIMA(p,d,q) models and determination of the roots of the characteristic polynomials. The statistical findings reveal, firstly, the impact of the employed depreciation methods of capital on the evolutionary pattern (monotonic or sinusoidal) of the series and secondly, the slow convergence of the Greek regional net fixed capital towards its long-run equilibrium value.
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Notes
[1] Eastern Macedonia and Thrace (E.M.T.), [2] Central Macedonia (C.M.), [3] Western Macedonia(W.M.), [4] Thessaly (TH.), [5] Epirus (EP.), [6] Ionian Islands (I.I.), [7] Western Greece (W.G.), [8] Central Greece (C.G.), [9] Attica (ATT.), [10] Peloponnese (PEL.), [11] Northern Aegean Islands (N.A.I.), [12] Southern Aegean Islands (S.A.I.), [13] Crete (CR).
At 5% significance level, the use of the KPSS unit root test and the visual examination of the series’ ACF correlograms, result in the determination of the same number of unit roots in the 69.23,& 53.84% of the cases when using the sld & ohs depreciation methods respectively, and in the 76.92% of the cases when using the ddb & syd methods.
See Enders (1995), ch. 1, pp. 1–61.
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Emmanouilidis, K., Karpetis, C., Varelas, E. et al. The dynamic evolution of the Greek regional net fixed capital time series. Econ Change Restruct 50, 211–238 (2017). https://doi.org/10.1007/s10644-017-9209-2
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DOI: https://doi.org/10.1007/s10644-017-9209-2