Confidence sets for the date of a break in level and trend when the order of integration is unknown

We propose methods for constructing confidence sets for the timing of a break in level and/or trend that have asymptotically correct coverage for both I(0) and I(1) processes. These are based on inverting a sequence of tests for the break location, evaluated across all possible break dates. We separately derive locally best invariant tests for the I(0) and I(1) cases; under their respective assumptions, the resulting confidence sets provide correct asymptotic coverage regardless of the magnitude of the break. We suggest use of a pre-test procedure to select between the I(0)- and I(1)-based confidence sets, and Monte Carlo evidence demonstrates that our recommended procedure achieves good finite sample properties in terms of coverage and length across both I(0) and I(1) environments. An application using US macroeconomic data is provided which further evinces the value of these procedures.     

Production Technology Estimates and Balanced Growth

Capital‐labour substitution and total factor productivity (TFP) estimates are essential features of many economic models. Such models typically embody a balanced growth path. This often leads researchers to estimate models imposing stringent prior choices on technical change. We demonstrate that estimation of the substitution elasticity and TFP growth can be substantially biased if technical progress is thereby mis‐specified. We obtain analytical and simulation results in the context of a model consistent with balanced and near‐balanced growth (i.e. departures from balanced growth but broadly stable factor shares). Given this evidence, a constant elasticity of substitution production function system is then estimated for the US economy. Results show that the estimated substitution elasticity tends to be significantly lower using a factor‐augmenting specification (well below one). We are also able to reject conventional neutrality forms in favour of general factor augmentation with a non‐negligible capital‐augmenting component. Our work thus provides insights into production and supply‐side estimation in balanced‐growth frameworks.     

Trading Partners and Trading Volumes: Implementing the Helpman–Melitz–Rubinstein Model Empirically

Helpman, Melitz and Rubinstein [Quarterly Journal of Economics (2008) Vol. 123, pp. 441–487] (HMR) present a rich theoretical model to study the determinants of bilateral trade flows across countries. The model is then empirically implemented through a two‐stage estimation procedure. We argue that this estimation procedure is only valid under the strong distributional assumptions maintained in the article. Statistical tests using the HMR sample, however, clearly reject such assumptions. Moreover, we perform numerical experiments which show that the HMR two‐stage estimator is very sensitive to departures from the assumption of homoskedasticity. These findings cast doubts on any inference drawn from the empirical implementation of the HMR model.     

The Relative Performance of Poisson and Negative Binomial Regression Estimators

Negative binomial estimators are commonly used in estimating models with count‐data dependent variables. In this paper, sampling experiments are used to evaluate the performance of these estimators relative to the simpler Poisson estimator in finite‐sample situations. The results do not suggest a clear preference for negative binomial estimators in situations in which the underlying dependent variables are overdispersed, unless the researcher is comfortable in assumptions about the precise form of the overdispersion.     

Real Existing Regionalism: The Region between Talk,Territory and Technology

In this essay, we propose the notion of real existing ‘lived’ regionalism as a rejoinder to the normative and ideological debates around new regionalism. Regional forms have shown little convergence in this age of globalized regionalization. Instead of an ideational construct or set of predictable practices, we argue that regionalism is a contested product of discourses (talk), territorial relationships (territory) and technologies (material and of power). The concept of real existing regionalism confronts the tensions between the discursive constructions and normative interventions characterizing much current regionalist debate and the territorial politics and technologies reflecting, generating and directing new state spatial strategic choices. The essay demonstrates the utility of the real existing regionalism framework through an analysis of the greenbelt, transport planning and post‐ suburbanization in Southern Ontario. We argue that regulatory institutions capture the Toronto region in a mix of rhetorical and technological change that complies with neither preconceived notions of regionalization nor the pessimism of total regional dysfunctionality. Rather, the lived experience of regionalization illuminates the emergent assemblages, multiplicity of everyday flows and ongoing multiscalar negotiations of diverse communities that produce the real existing region.     

Building from Scratch: New Cities,Privatized Urbanism and the Spatial Restructuring of Johannesburg after Apartheid

By the start of the twenty‐first century, the once dominant historical downtown core of Johannesburg had lost its privileged status as the center of business and commercial activities, the metropolitan landscape having been restructured into an assemblage of sprawling, rival edge cities. Real estate developers have recently unveiled ambitious plans to build two completely new cities from scratch: Waterfall City and Lanseria Airport City (formerly called Cradle City) are master‐planned, holistically designed ‘satellite cities’ built on vacant land. While incorporating features found in earlier city‐building efforts, these two new self‐contained, privately‐managed cities operate outside the administrative reach of public authority and thus exemplify the global trend toward privatized urbanism. Waterfall City, located on land that has been owned by the same extended family for nearly 100 years, is spearheaded by a single corporate entity. Lanseria Airport City/Cradle City is a planned ‘aerotropolis’ surrounding the existing Lanseria airport at the northwest corner of the Johannesburg metropole. These two new private cities differ from earlier large‐scale urban projects because everything from basic infrastructure (including utilities, sewerage, and the installation and maintenance of roadways), landscaping, security services, the regulation of common spaces, and selling and branding the city are firmly in the hands of private profit‐making corporate entities and outside the mandate of public authorities.