Introduction
Chapter
Abstract
Econometrics and modelling in economics are carried out under a set of simplifying assumptions in order to achieve generality through simplicity. As long as the results from these models are not considered overly sensitive to violations of these assumptions the results still perform a useful function. However, when these results fail to be robust, provide unsatisfactory explanations for a newly observed phenomenon, or yield inaccurate predictions, then the justification for the simplifying assumptions becomes suspect. This leads to a need for models which use assumptions that are less restrictive and whose logical and empirical underpinnings are more firmly embedded in economic theory than those previously used.
Keywords
Unit Root Kernel Estimation Demand System Economic Time Series Univariate Time Series
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Notes
- 1.An excellent review of earlier literature on this topic is given by Maddala (1983).Google Scholar
- 2.Some recent developments in Structural Stability Analysis are discussed in a special issue of Empirical Economics (1989).Google Scholar
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© Springer Science+Business Media Dordrecht 1989