Spurious levels relationships
نویسندگان
چکیده
The bounds testing approach of Pesaran et al. (2001) allows examination of levels relationships between series when their orders of integration are either unknown or uncertain. In this paper it is shown that when the order of integration of a series is uncertain due to the presence of structural change, the bounds testing procedure is subject to severe size distortion and consequently detects spurious relationships between independent variables.
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