This paper considers the most important aspects of model uncertainty for spatial regression models, namely the appropriate spatial weight matrix to be employed and the appropriate explanatory variables. We focus on the spatial Durbin model (SDM) specification in this study that nests most models...

Cross-demand creates links between goods which cause demand-driven cross-price dependencies. We construct a theoretical model to analyze their role in propagating microeconomic price shocks to the CPI inflation rate and examine their empirical relevance using spatial econometric techniques. The...