Hinich, Melvin; Chong, Terence - In: Studies in Nonlinear Dynamics & Econometrics 11 (2007) 2, pp. 1382-1382
Diebold and Rudebusch (1991) and Haubrich (1993) argue that, when income follows a fractionally differenced process, the Deaton's excessive smoothness paradox can be resolved. A key to the success of their result relies on a valid test for fractional integration. However, most of the tests in...