Mathematics
8 years ago

New test detects hidden economic risks before they impact society.

On a Likelihood Ratio Test for Idiosyncratic Unit Roots in the Exact Factor Model with Nonstationary Common Shocks
Martin Solberger

Paper Summary

The article explores a test for unit roots in a model with hidden common trends affected by non-stationary factors. Through simulations, the researchers assessed the test's ability to detect these unit roots.

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