Cointegration Rank Test and Long Run Specification: A Note on the Robustness of Structural Demand Systems

Private demand systems provide a practical application for analyzing identification issues in cointegration analysis. The paper conducts Montecarlo simulation experiments of cointegrated demand systems by assuming non-separability of government consumption. This framework enables further to test the robustness of models under alternative empirical specifications in which the homogeneity restriction is assumed to hold. The results highlight that separability of utility function with respect to government spending and the over-inclusion of lagged dependent variables introduce important bias in identifying the long run demand system, while the model specification with homogeneity restriction perform better when the theoretical hypothesis is contained in the data.Length: 34 pagesNon-separable structural models, Demand systems, Homogeneity.

Partition function of the Potts model on self-similar lattices as a dynamical system and multiple transitions

We present an analytic study of the Potts model partition function on two different types of self-similar lattices of triangular shape with non integer Hausdorff dimension. Both types of lattices analyzed here are interesting examples of non-trivial thermodynamics in less than two dimensions. First, the Sierpinski gasket is considered. It is shown that, by introducing suitable geometric coefficients, it is possible to reduce the computation of the partition function to a dynamical system, whose variables are directly connected to (the arising of) frustration on macroscopic scales, and to determine the possible phases of the system. The same method is then used to analyse the Hanoi graph. Again, dynamical system theory provides a very elegant way to determine the phase diagram of the system. Then, exploiting the analysis of the basins of attractions of the corresponding dynamical systems, we construct various examples of self-similar lattices with more than one critical temperature. These multiple critical temperatures correspond to crossing phases with different degrees of frustration.Comment: 16 pages, 12 figures, 1 table; title changed, references and discussion on multiple transitions adde