Chee Kian Leong

Testing for spurious and cointegrated regressions: A wavelet approach

This paper proposes a wavelet-based approach to analyze spurious and cointegrated regressions in time series. The approach is based on the properties of the wavelet covariance and correlation in Monte Carlo studies of spurious and cointegrated regression. In the case of the spurious regression, the null hypotheses of zero wavelet covariance and correlation for these series across the scales fail to be rejected. Conversely, these null hypotheses across the scales are rejected for the cointegrated bivariate time series. These nonresidual-based tests are then applied to analyze if any relationship exists between the extraterrestrial phenomenon of sunspots and the earthly economic time series of oil prices. Conventional residual-based tests appear sensitive to the specification in both the cointegrating regression and the lag order in the augmented Dickey–Fuller tests on the residuals. In contrast, the wavelet tests, with their bootstrap t-statistics and confidence intervals, detect the spuriousness of this relationship.

Response to the comment on testing for spurious and cointegrated regressions: a wavelet approach

In ‘A Note on Wavelet Correlation and Cointegration’, Fernandez-Macho [1] argued that the test proposed in Leong and Huang [4] is ‘just a mere test of correlation that cannot be used as a test of cointegration’. Such a dismissive statement is puzzling. According to Phillips and Ouliaris [6], the conditional variance parameter used in residual-based tests, denoted by ω11.2, is defined by ω11.2 = ω11(1 − ρ), where ρ2 is the squared correlation coefficient given by ρ = ω 21 −1 22 ω21 ω11 .

Impact of Population Growth and One Child Policy on Economic Growth of China

This paper examines the relationship between population growth and economic growth of China at both the national level and provincial level. We base our specification on a version of neoclassical Solow model and incorporates the one child policy implemented in 1979 as a policy variable. At the national level, a 1% increase of population growth rate would facilitate a 1.7% increase in economic growth rate. However, the one child policy slowed down the population growth, which indirectly lowered the national economic growth. At the provincial level, the impact of population growth becomes negative after 1979 with every 1% increase in population growth decreasing GDP by 1.2%. The one child policy plays a statistically significant and positive role in provincial economic growth.

Using Blogs in E-Learning for Undergraduate Economics: A Tutor's Perspective

Blogging is conventionally regarded as a personal activity in which a blogger publishes a series of chronological posts on various topics. This paper explores the potentials of using blogging as a form of e-learning for undergraduate economics. We assume the perspective of the tutor, for whom the affordance of the blog as a dynamic medium, as opposed to the static and closed model of producing learning objects in e-learning, results in both time savings and a more differentiated approach to content delivery. Contrary to the popular belief that students must be assessed or graded to ensure participation in e-learning, the results from this exploratory study also suggest that students can participate actively and voluntarily in e-learning if the content posted on the blogs meet their learning needs.

Incentives and the needham paradox: An agent-based perspective

This article discusses how restructured incentives could have inhibited innovation in ancient China and explain the Needham paradox. Agents in a genetic algorithmic game maximize their payoffs by choosing between innovating and studying the Classics. By restructuring incentives toward studying the Classics, initial spurts of innovation are smothered, resulting in a population with all agents studying the Classics. The incentive structure has a statistically and quantitatively significant impact on the expected average payoffs and the strategy profile of the population: the average payoffs for a regime which rewards innovation fluctuate more but are always higher and the strategy profile is varied.

The cult of statistical significance: how the standard error costs us jobs, justice, and lives

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