Structural transformation is a process by which the relative contribution of nonagricultural sectors to the overall economy rises as agriculture’s share declines in relative terms. In absolute terms, however, agriculture continues to grow and contribute to overall economic growth. Agricultural productivity growth and increased farm incomes are prerequisites for structural transformation. Increa...

A short memory process that encounters occasional structural breaks in mean can show a slower rate of decay in the autocorrelation function and other properties of fractional integrated I (d) processes. In this paper we employed a procedure for estimating the fractional differencing parameter in semiparametric contexts proposed by Geweke and Porter-Hudak (1983) to analyse nine daily rainfall da...

Many structural break and regime-switching models have been used with macroeconomic and …nancial data. In this paper, we develop an extremely ‡exible parametric model which can accommodate virtually any of these speci…cations –and does so in a simple way which allows for straightforward Bayesian inference. The basic idea underlying our model is that it adds two simple concepts to a standard sta...

Structural change is a major source of forecast failure. Immediately after a break, forecasting problems are particularly severe due to a lack of information about the new data generation process. Techniques exist for monitoring for structural change in real time, but the optimal post-break strategy is unexplored. We consider two approaches. First, monitoring for change and then combining forec...

In econometric literatures, a number of tests for unit roots have been proposed in the presence of structural changes in I(1) and I(0) model when the numbers of break points are or are not known (though their locations are unknown). Recently [2] proposed a unit root test consisted of two steps: estimating break points and testing a unit root, but their methods resulted in remarkable negative bi...

Cropping systems in Western Australia (WA) are strongly dominated by cereals (wheat, barley and oaten hay) and are inextricably linked to soil quality and moisture supply. So a major research challenge is to devise cropping systems that improve soil health and maximise water-use efficiency. For a profitable and sustainable production system there is a clear need for ‘break crop’ to provide a pe...

The two-break unit root test of Lumsdaine and Papell (1997) is examined and found to suffer from bias and spurious rejections in the presence of structural breaks under the null. A two-break minimum LM unit root test is proposed as a remedy. The two-break LM test does not suffer from bias and spurious rejections and is mostly invariant to the size, location, and misspecification of the breaks. ...

Although the impacts of structural instability on testing for unit root have been studied extensively for univariate time series, such impacts on panel data unit root tests are still relatively unknown. A major issue is the choice of model in accommodating different types of break (instability) prior to testing for unit root. Specifically, researchers must specify a potential break in the inter...

We develop tests for structural breaks of factor loadings in dynamic factor models. We focus on the joint null hypothesis that all factor loadings are constant over time. Because the number of factor loading parameters goes to infinity as the sample size grows, the conventional test cannot be used. Based on the fact that the estimated factors will demonstrate a higher dimension under the altern...