Economics - Research Publications

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    Providing intuition to the Fieller Methodwith two geometric representationsusing STATA and Eviews
    Hirschberg, J. G. ; Lye, J. N. ( 2007-04)
    The Fieller Method for the construction of confidence intervals for ratios of the expectedvalue of two normally distributed random variables has been shown by a number of authorsto be a superior method to the delta approximation. However, it is not widely used due inpart, to the tendency to present the intervals only in a formula context. In addition, potentialusers have been deterred by the potential difficulty in interpreting non-finite confidenceintervals when the confidence level is less than 100%. In this paper we present two graphicalmethods which can be easily constructed using two widely used statistical software packages(Eviews and Stata) for the representation of the Fieller intervals. An application is presentedto assess the results of a model of the non-accelerating inflation rate of unemployment(NAIRU).
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    Alternative forms for restricted regressions
    Hirschberg, Joe ; Lye, Jenny ; Slottje, Daniel J. ( 2005-11)
    The estimation of regression models subject to linear restrictions, is a widely appliedtechnique, however, aside from simple examples, the equivalence between the linear restrictedcase to the reparameterization or substitution case is rarely employed. We believe this is due tothe lack of a general transformation method for changing from the definition of restrictions interms of the unrestricted parameters to the equivalent reparameterized model and conversely,from the reparameterized model to the equivalent linear restrictions for the unrestricted model.In many cases the reparameterization method is computationally more efficient especially whenestimation involves an iterative method. But the linear restriction case allows a simple methodfor adding and removal of restrictions.In this paper we derive a general relationship that allows the conversion between the twoforms of the restricted models. Examples involving systems of demand equations, polynomiallagged equations, and splines are given in which the transformation from one form to the otherare demonstrated as well as the combination of both forms of restrictions. In addition, wedemonstrate how an alternative Wald test of the restrictions can be constructed using anaugmented version of the reparameterized model.