It is well known that, in a multinomial probit, only the covariance matrix of the location and scale normalized utilities are identified. In this study, we explore the relation between these identifiable parameters and the original elements of the covariance matrix, to find out what can be...

The only data on the unemployment rate currently published by Instituto Nacional de Estatística are the quarterly figures from Inquérito ao Emprego. In periods when the conditions in the labour market are more volatile, this three-month gap in which there is no information about the changes in...

Understanding and quantifying the determinants of the number of sectors or firms exporting in a given country is of relevance for the assessment of trade policies. Estimation of models for the number of sectors, however, poses a challenge because the dependent variable has both a lower and upper...

Tests of overidentifying restrictions are widely used in practice. However, there is often confusion about the nature of their null hypothesis and about the interpretation of their outcome. In this note we argue that these tests give little information on whether the instruments are correlated...

We critically review the recent literature on currency unions, and discuss the methodological challenges posed by the empirical assessment of their costs and benefits. In the process, we provide evidence on the economic effects of the euro. In particular, and in contrast with estimates of the...

The use of robust regression estimators has gained popularity among applied econometricians. The main argument invoked to justify the use of the robust estimators is that they provide efficiency gains in the presence of outliers or non-normal errors. Unfortunately, most practitioners seem to be...

Helpman, Melitz, and Rubinstein (2008)�HMR�present a rich theoretical model to study the determinants of bilateral trade flows across countries. The model is then empirically implemented through a two-stage estimation procedure. This note seeks to clarify some econometric aspects of the...

We extend the simulation results given in Santos Silva and Tenreyro (2006, �The log of gravity,� The Review of Economics and Statistics, 88, 641-658) by considering data generated as a finite mixture of gamma variates. Data generated in this way can naturally have a large proportion of zeros...

This paper proposes a test to check the specification of models with unobserved individual effects integrated out by quadrature and also a simple way of increasing the flexibility of this type of model. The results of a Monte Carlo study and an application using a well-known data set illustrate...