In this study, we introduce statistics for testing neglected nonlinearity using the extreme leaning machines introduced by Huang, Zhu, and Siew (2006, Neurocomputing) and call them ELMNN tests. The ELMNN tests are very convenient and can be widely applied because they are obtained as byproducts...

This paper aims to lay the groundwork for a Korean model of technical change. For this purpose, it reviews theories of technical change with primary emphasis on its impact on economic development from the perspective of the history of economic thought. First, it examines neoclassical theory of...

We develop a multi-country quantitative model of the global distribution of current account and external balances. Countries accumulate domestic capital and foreign assets to smooth consumption over time against exogenous productivity shocks in the presence of liquidity constraints. In...

We start from deriving several option pricing formulas of which the prices of underlying asset follow three different commonly used heavy-tailed distribution functions; Generalized Pareto Distribution, Generalized Logistic Distribution, and Generalized Extreme Value Distribution. The derived...

This paper investigates the validity of technology shocks as a driving force of U.S. business cycle fluctuations. Using three well-known structural vector autoregression (SVAR) models, we analyze how structural shocks are associated with the variations of output and hours worked at business...

Many people are not free from past sunk costs in their decision making processes, even though economic theory tells them to forget the sunk costs. In this paper we will show that it can be a rational behavior for the people not to forget the sunk cost when people are concerned with their future...

We develop a method of testing linearity using power transforms of regressors, allowing for stationary processes and time trends. The linear model is a simplifying hypothesis that derives from the power transform model in three different ways, each producing its own identification problem. We...

We provide mathematical proofs for the results in "Testing Linearity Using Power Transforms of Regressors" by Baek, Cho, and Phillips (2014).