This paper focuses on the practice of serial correlation correcting of the Linear Regression Model (LRM) by modeling the error. Simple Monte Carlo experiments are used to demonstrate the following points regarding this practice. First, the common factor restrictions implicitly imposed on the...

This paper focuses on the practice of serial correlation correcting of the Linear Regression Model (LRM) by modeling the error. Simple Monte Carlo experiments are used to demonstrate the following points regarding this practice. First, the common factor restrictions implicitly imposed on the...

Quadratic flexible forms, such as the translog and generalized Leontief, are separability inflexible. That is, separability restrictions render them inflexible with regard to separable structures. A class functional forms is proposed that is flexible with regard to general production structures...

This paper demonstrates that linear regression models with an AR(1) error structure implicitly assume that y{t} does not Granger cause any of the exogenous variables in X{t}. An indirect test of the common factor restrictions based on this Granger non-causality is proposed and shown to...