Local Whittle estimation in nonstationary and unit root cases

Abstract

Asymptotic properties of the local Whittle estimator in the nonstationary case (d>1/2) are explored. For 1/2<d≤ 1, the estimator is shown to be consistent, and its limit distribution and the rate of convergence depend on the value of d. For d=1, the limit distribution is mixed normal. For d>1 and when the process has a polynomial trend of order α >1/2, the estimator is shown to be inconsistent and to converge in probability to unity.

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