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Comparisons of Tests for the Presence of Random Walk Coefficients in a Simple Linear Model

Comparisons of Tests for the Presence of Random Walk Coefficients in a Simple Linear Model

Abstract Abstract The locally most powerful test is derived for the hypothesis that the regression coefficients are constant over time against the alternative that they vary according to the random walk process. When the regression equation contains the constant term only, comparisons are made with the tests suggested by LaMotte …