Equation Balance and Dynamic Political Modeling

Author:

Lebo Matthew J.,Grant Taylor

Abstract

The papers in this symposium agree on several points. In this article, we sort through some remaining areas of disagreement and discuss some of the practical issues of time series modeling we think deserve further explanation. In particular, we have five points: (1) clarifying our stance on the general error correction model in light of the comments in this issue; (2) clarifying equation balance and discussing how bounded series affects our thinking about stationarity, balance, and modeling choices; (3) answering lingering questions about our Monte Carlo simulations and exploring potential problems in the inferences drawn from long-run multipliers; (4) reviewing and defending fractional integration methods in light of the questions raised in this symposium and elsewhere; and (5) providing a short practical guide to estimating a multivariate autoregressive fractionally integrated moving average model with or without an error correction term.

Publisher

Cambridge University Press (CUP)

Subject

Political Science and International Relations,Sociology and Political Science

Reference75 articles.

1. Helgason (2016) asks this critical question in relation to KL&W's claims: “However, in their simulation analysis they do not provide a comparison with the most relevant counterfactual: Namely, whether assuming that data is stationary or integrated while it is actually fractionally integrated is preferable to employing an uncertain estimate of fractional integration and proceeding accordingly.”

2. For now, Stata only allows use of the inferior EML estimator. Both Robinson's and Geweke's estimators are available in RATS. A wider array of fractional methods may also be found in either R or Matlab. R is open source. Economists using fractional methods are generally quite generous in sharing their Matlab code.

3. The Dynamics of the Partisan Gender Gap

4. Enders Walter . 2004. Applied econometric time series. 2nd ed. New York: Wiley.

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