Finding the Functional Forms for Slowly Changing Dependencies

HECER Discussion Paper No. 253

38 Pages Posted: 1 Mar 2009  

Olli Tapani Ropponen

Government of the Republic of Finland - Government Institute for Economic Research (VATT); University of Helsinki - Department of Political and Economic Studies

Date Written: February 27, 2009

Abstract

This study introduces a two step method for finding the functional form for the model to be estimated. The proposed method allows us to get rid of the restrictions of the parallel model even when there are no interaction terms available. It is applicable in the cases where the dependencies change slowly. The method is applied to the data of Finnish Household Surveys.

Keywords: Semiparametric Methods, Modelling, Consumption

JEL Classification: C14, C50, E21

Suggested Citation

Ropponen, Olli Tapani, Finding the Functional Forms for Slowly Changing Dependencies (February 27, 2009). HECER Discussion Paper No. 253. Available at SSRN: https://ssrn.com/abstract=1350197 or http://dx.doi.org/10.2139/ssrn.1350197

Olli Tapani Ropponen (Contact Author)

Government of the Republic of Finland - Government Institute for Economic Research (VATT) ( email )

Arkadiankatu 7
P.O Box 1279
Helsinki, FIN-00531
Finland

University of Helsinki - Department of Political and Economic Studies ( email )

P.O. Box 54
FIN-00014 Helsinki
Finland

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