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Monte Carlo likelihood-ratio tests for Markov switching models / Gabriel Rodriguez Rondon, Jean-Marie Dufour.FB3-5/2026-23E-PDF

"Markov switching models are widely used to capture nonlinearities arising from regime shifts. Most existing tests for the number of regimes focus on one versus two regimes. Even in such simple cases, this type of problem raises issues of non-standard asymptotic distributions, identification failure, and nuisance parameters. We address these difficulties by applying the technique of Monte Carlo tests, which yields both finite-sample and asymptotically valid procedures, without the need to establish an asymptotic distributional theory, nor the existence of an asymptotic distribution"--Abstract.

Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.965211&sl=0

Publication information
Department/Agency
  • Bank of Canada, issuing body.
TitleMonte Carlo likelihood-ratio tests for Markov switching models / Gabriel Rodriguez Rondon, Jean-Marie Dufour.
Series title
  • Staff working paper = Document de travail du personnel, 1701-9397 ; 2026-23
Publication typeMonograph - View Master Record
Language[English]
FormatDigital text
Electronic document
Note(s)
  • Title from cover.
  • Includes bibliographical references (pages 29-34, A-23).
Publishing information
  • [Ottawa] : Bank of Canada = Banque du Canada, July 2, 2026.
  • ©2026
Author / Contributor
  • Rodriguez Rondon, Gabriel, author.
Description1 online resource (34, A-23 pages) : graphs.
Catalogue number
  • FB3-5/2026-23E-PDF
Subject terms
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