A NOTE ON ASYMPTOTIC INFERENCE IN AUTOREGRESSIVE MODELS WITH ROOTS ON THE UNIT CIRCLE

Abstract
An estimation and inference procedure is proposed for parameters of the pth order autoregressive model with roots both on the unit circle and outside the unit circle. The procedure is motivated by the fact that the parameter estimates of the nonstationary part of the model have higher order consistency properties than the parameter estimates of the stationary part. The procedure allows the use of the known asymptotic distributional results of purely nonstationary models and purely stationary models. Only ordinary least squares routines are needed.

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