Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 1998-07-09
Number: 98-072/3
Author-Name: Thomas de Graaff
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: Raymond J.G.M. Florax
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: Peter Nijkamp
Author-Email: pnijkamp@feweb.vu.nl
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: Aura Reggiani
Author-Workplace-Name: University of Bologna
Title: Diagnostic Tools for Nonlinearity in Spatial Models
Abstract: There is an increasing awareness of the potential of nonlinear modeling in regional science, which can partly be explained by the recognition of the limitations of conventional equilibrium models in complex situationsand partly by the easy availability and accessibility of sophisticated computational  techniques. Among the class of nonlinear models chaos theory stands out as an interesting approach, in which notable progress hasbeen made in economic research. However, the operational significance– in terms of solid empirical tests on chaos – has still been rather limited and a rigorous statistical-econometric treatment of chaos phenomena isstill lacking. This paper is concerned with a methodological and empirical analysis of chaos in spatial systems. It seeks to break new research ground by linking the classical diagnostic tools developed in spatial econometrics to nonlinearity tests for empirical data series, in particular the so-called BDS (Brock, Dechert, Scheinkman) test. A spatial variant of the BDS test is developed, and subsequently applied in the context of a shift-share model for Dutch regional labor markets.
Classification-JEL: C12; C14; C45; R12; R23
Keywords: chaos theory; misspecification tests; spatial dependence; nonlinearity; shift-share model; regional labor markets
File-Url: https://papers.tinbergen.nl/98072.pdf
File-Format: application/pdf
File-Size: 235961 bytes
Handle: RePEc:tin:wpaper:19980072