Structural Shift with an Inter-Structural Transition Function

Arbeitspapier

The purpose of this paper is to suggest a simple model for the regression problem of a known switching date in structures which consumes several intervals of time to complete the shift. This model, then, permits a smooth transition from an old to a new structure, and is easily tested by employing standard t and F tests. Before presenting the model, a few examples of the type of economic problems for which this model is applicable will be discussed. First, the establishment of an Incomes Policy may take a number of time intervals to affect a change in the underlying structure (e.g, inflation expectations). Or, the price response of exporters and importers to a revaluation of a fixed foreign exchange rate may not occur simultaneously, but rather may be partially absorbed in profit margins over a transition period. Finally, corporation adjustments to a new industrial policy may be extended over a number of years. As illustrated in the present paper, the model is successfully applied to a structural shift problem of this latter variety arising from the signing of the Canada-U.S. Automotive Agreement.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Queen's Economics Department Working Paper ; No. 92

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Wilton, D.A.
• Event: Veröffentlichung
• (who): Queen's University, Department of Economics
• (where): Kingston (Ontario)
• (when): 1972

Further information

• Handle: http://hdl.handle.net/10419/189077
• Last update: 10.03.2025, 11:42 AM CET