Iterative Testing Procedure Research Articles

Are greenhouse gas emissions converging in Latin America? Implications for environmental policies

This paper investigates greenhouse gas emissions convergence among nineteen Latin American countries, for the period 1970 to 2018. To that end, we use the Phillips–Sul methodology to examine whether these countries have followed an absolute convergence process, or whether there has been a club convergence process. Our results offer important insights into the greenhouse gas emissions catch-up exhibited by several countries, and do not support the hypothesis that all countries of the Latin American region, taken together, converge to a single equilibrium in greenhouse gas emissions intensity. We find strong evidence of subgroups that converge to different steady states. An iterative testing procedure reveals the existence of different patterns of behavior and shows that such emissions are not uniform across these countries. We also estimate an Ordered Logit Model to identify the forces underlying the creation of clubs and the likelihood that any given country will be a member of any convergence club. Estimates from an Ordered Logit Model reveal that income, population density, openness, natural resources rents, and – particularly – the level of corruption, play a crucial role in explaining the formation of convergence clubs. The existence of clubs means that the climate policies aimed at reducing emissions should consider the specific characteristics of the countries, according to the club convergence results.

Convergence and transition paths in transportation: Fresh insights from a club clustering algorithm

This study examines the convergence in global transportation for 102 countries spanning 1990–2018. The econometric convergence method of Phillips and Sul was employed to test club convergence and the modelling of transition paths to convergence. I disaggregated the panel data into five regions, based on the United Nations classification of geographical regions. Transportation infrastructure was constructed by using a composite index of transportation via the principal component analysis/method. Our findings suggest the presence of panel convergence at the global and regional levels (except for Africa, Europe and Oceania, which exhibited divergence). However, I identified different numbers of clubs for the regions using an iterative testing procedure and found that the results could not be generalised across the regions as there were both convergent and divergent clubs. The policy measures on transport infrastructures for the regions are discussed in this study.

Convergence or Divergence Patterns in Global Defence Spending: Further Evidence from a Nonlinear Single Factor Model

Abstract This study re-examines the international convergence in defence spending for 125 countries spanning 1985–2018. We employ the approach of Phillips and Sul, which tests for the existence of convergence clubs and the modelling of different transition paths to convergence. Our findings suggest no overall defence spending convergence at the world, income groups (except the low-income countries) and regional levels. However, we identify two convergence clubs using an iterative testing procedure and eventually (i) at world level, these two clubs exhibit convergence, and (ii) while taking into account Gross national income, geography and defence alliances/economic cooperation it is possible to make different number of convergence/divergence clubs. Contrary to previous findings, this study finds that the process of convergence in defence spending does not reflect the desirable emanations of defence policies sharing similar characteristics, at least in terms of the allocation of scarce public resources across the globe.

Analysis of convergence in transport infrastructure: a global evidence

This study investigates the convergence in transport infrastructure for 102 countries spanning 1990-2018 using Phillips and Sul econometric methodology. We constructed a transportation infrastructure by a composite index of transportation computed via principal component analysis (PCA). Our findings suggest the presence of panel convergence at the global level, while the income groups exhibited panel divergence. The results obtained from the iterative testing procedure suggest that the sub-groups exhibited convergence and divergence features. Overall, this study finds that the process of convergence in transportation reflects the desirable emanations of transportation policies sharing possible similar characteristics, at least to some extent, across the globe.

Convergence patterns in global ICT: Fresh insights from a club clustering algorithm

Digital provide consists of electronic media, telecommunications, and computer technologies – information and communication technologies (ICTs) availability, accessibility, and utilisation, which simplifies process. The convergence of ICTs ensures efficiency in resources allocation and promotes system growth. This study examines the convergence in global information and communication technologies (ICT) development for 205 countries spanning 2000–2018. We employ the Phillips and Sul econometric methodology, which tests for the existence of convergence clubs and the modelling of different transition paths to convergence. We further disaggregated our panel data into nine regions. We constructed an ICT development index (comprising of mobile line, fixed line, and internet access penetration) via principal component analysis. Our findings suggest the presence of panel convergence at the global and regional levels (except for Sub-Saharan Africa and South Asia, which exhibited divergence). However, we identified convergence clubs using an iterative testing procedure. The key findings from the club convergence algorithm results suggest that: (i) at the global level, club 1 converges; (ii) at regional levels, Sub-Saharan Africa forms 7 clubs; (iii) clubs 1 in the remaining 8 regions converged. Contrary to previous findings, this study finds that the process of convergence in ICT development reflects the desirable emanations of telecommunication policies sharing similar characteristics, at least to some extent, in terms of the ICT sharing across the globe.

Risk Measure Inference

We propose a bootstrap-based test of the null hypothesis of equality of two firms’ conditional risk measures (RMs) at a single point in time. The test can be applied to a wide class of conditional risk measures issued from parametric or semiparametric models. Our iterative testing procedure produces a grouped ranking of the RMs, which has direct application for systemic risk analysis. Firms within a group are statistically indistinguishable from each other, but significantly more risky than the firms belonging to lower ranked groups. A Monte Carlo simulation demonstrates that our test has good size and power properties. We apply the procedure to a sample of 94 U.S. financial institutions using ΔCoVaR, MES, and %SRISK. We find that for some periods and RMs, we cannot statistically distinguish the 40 most risky firms due to estimation uncertainty.

An accelerated multilevel test and design procedure for polymer gears

This paper presents a new accelerated testing procedure for plastic gears that is based on several different levels of testing. The iterative testing procedure fulfils requests from the product development process. The following criteria are considered for testing: reduced number of tests, shorter test time and reliable results for different applications. The proposed method was applied over the full range on a gear pair made from polyacetal (POM) and polyamide 6 (PA6). Different rotational speeds and torque loads, and therefore different transferred powers, were used for testing. During testing, gear temperature and cycles to failure were monitored. The paper also includes a comparison between the measured and theoretically calculated gear temperatures. A prediction of the life span on the basis of statistical methods is a part of the proposed test procedure. The presented procedure enables testing within acceptable cost and time consumption limits. The testing method can be reproduced and applied to plastic gears from different materials.Testing has shown that polymer gears fail in two typical ways: by fatigue and by sudden melting. The wear fail mode can be avoided by using an appropriate material pair. Fatigue can be measured by life span tests and is predictable. However, the melting of gears, which is a consequence of high gear temperatures, is not easily predictable. In most cases, melting failure mode occurs during the first few hours of gear testing. For reliable and optimal gear design, gear testing cannot be avoided because the tribological interaction between gears is specific for each combination of materials.

The evolution of economic convergence in the European Union

This paper investigates per capita real income convergence in the European Union (EU) within a non-linear latent factor framework. We establish a set of novel stylized facts on economic convergence between 1970 and 2010 in light of the institutional changes and macroeconomic adjustment processes undertaken over the last 40 years. Our findings suggest no overall income convergence in the EU, however, we identify convergence clubs using an iterative testing procedure. The clubs are formed mainly on the basis of geographic region, and clustering is not necessarily related to EMU membership. The empirical evidence suggests a clear separation between the new and old EU member states in the long run, and we observe a division along the South-East vs. North-West dimension since the 1990s.

A Sequential and Iterative Testing Procedure to Identify the Nature of a Time Series Generating Process

An inferential approach is proposed to identify the nature of the generating process corresponding to a real time series. This new sequential and iterative testing procedure goes beyond the Box and Jenkins methodology for the identification, estimation, and validation of linear data generating processes by investigating the probabilistic structure of non-Gaussian estimated residuals {ϵ t } for the possible presence of nonlinear serial dependence. The testing procedure aims at indicating the right type of dependence present in a series by means of specific inferential tests on the moments of the generating structure probability distribution. The test statistics adopted are very popular and powerful and encompass a wide range of stochastic nonlinearity alternatives. The U.S. Industrial Production Index series is used to illustrate the iterative testing procedure proposed.

Demand System Estimation with Upward‐Sloping Supply

This paper motivates the use of three‐stage least squares in demand systems estimation in which disaggregated data are used and supply adjustment costs exist. A system of Japanese meat expenditures is used as an example. It is shown that all but one of the meat prices are endogenous to the system. Correcting these prices for endogeneity has a significant effect on the calculated elasticities.Cet ouvrage utilise la technique de minimisation des moindres carrés à trois étapes dans un système de demande utilisant des données désagrégées et où des coûts d'ajustement de l'offre existent. Un système de dépenses pour les viandes au Japon est utilisé comme exemple. Il est démontré que tous les prix des viandes sont endogènes à l'exception d'un seul. Les élasticités qui sont dérivées sont très sensibles à l'endogénization des prix.SUMMARYThere are three important implications of this work. First, demand systems estimates that overlook supply response are as subject to simultaneous equations bias as single ad hoc demand equations. Theil shows theoretically that assuming supply curves are perfectly elastic, when in fact they are not will underestimate price responsiveness in demand equations. An empirical example is presented that demonstrates that the price elasticities generally increase when upward‐sloping supplies are assumed.Second, the iterative testing procedure presented may provide direction for model building when the true structure of the system is unknown. For example, the results of the Wu‐Hausman test indicate that assuming chicken supply is perfectly elastic in a model of the Japanese livestock industry is justified. The results also indicate that the supplies of Wagyu beef, dairy beef, pork and fish are upward‐sloping and therefore should be modeled as endogenous variables in the demand system.Third, the results emphasize the sensitivity of projections of Japanese beef imports to the assumptions underlying the demand system. If perfectly elastic meat supplies are assumed for an analysis of reducing Japanese beef import liberalization, the results will likely underestimate the impacts on beef imports.In summary, the supply curves for agricultural products tend to slope upward within the time periods used for traditional policy analysis and demand system estimation, which in turn implies that prices are determined endogenously within the system. Endogenous price determination is contrary to the assumptions that underlie the theoretical foundations and many empirical applications of demand systems. We present a methodology to test for and adjust demand systems for endogeneity. The importance of this adjustment is demonstrated by using an analysis of the liberalization of the Japanese beef market.

Expanded design procedures for learnable, usable interfaces (panel session)

Expanded design procedures for learnable, usable interfaces (panel session)