COINTEGRATION AND THE FORECAST ACCURACY OF VAR MODELS

This paper assesses the forecast performance of a set of VAR models under a growing number of restrictions. With a maximum forecast horizon of 12 years, we show that the farther the horizon is, the more structured and restricted VAR models have to be to produce accurate forecasts. Indeed, unrestricted VAR models, not subjected to integration or cointegration, are poor forecasters for both short and long run horizons. Differenced VAR models, subject to integration, are reliable predictors for one-step horizons but ineffectual for multi-step horizons. Cointegrated VAR models including appropriate structural breaks and exogenous variables, as well as being subjected to over-identifying theory consistent restrictions, are excellent forecasters for both short and long run horizons. Hence, to obtain precise forecasts from VAR models, proper specification and cointegration are crucial for whatever horizons are at stake, while integration is relevant only for short run horizons.VAR demand systems; structural breaks, exogenous regressors, integration; cointegration; forecast accuracy.

Testing Alternative Dynamic Systems for Modelling Tourism Demand

The goals in this paper are to contribute an empirical study of tourism demand dynamics, and to point out areas where the scrutiny of relationships between theoretical and empirical considerations are likely to produce new insights in this area of research. A flexible general form of a Dynamic Almost Ideal Demand System (DAIDS) is derived to analyse the UK tourism demand for its geographically proximate neighbours Portugal, Spain and France, in the period 1969-1997. Nested within the general dynamic structure are Deaton and Muellbauer’s static AIDS model itself, the partial adjustment model and the auto-regressive distributed lag model, which are tested against the general dynamic alternative. The empirical results obtained show that DAIDS is a data coherent and theoretically consistent model, providing evidence of the robustness of this methodology to conduct tourism demand analysis in a temporal context. Moreover, the dynamic model offers statistically strong evidence on the inadequacy of the orthodox static AIDS and the other restricted models to reconcile consistently data and theory within their formulations. Estimates for tourism price and expenditure elasticities are obtained, permitting a comparative analysis of the relative magnitudes and statistical relevance of long and short run sensitivity of the UK tourism demand to changes in its determinants.Tourism Demand, dynamic almost ideal system, partial adjustment system, autoregressive distributed lag system.

Essence and Cause: Making Something Be What It Is

Aristotle frequently describes essence as a “cause” or “explanation”, thus ascribing to essence some sort of causal or explanatory role. This explanatory role is often explicated by scholars in terms of essence “making the thing be what it is” or “making it the very thing that it is”. I argue that this is problematic, at least on the assumption that “making” expresses an explanatory relation, since it violates certain formal features of explanation. I then consider whether Aristotle is vulnerable to this problem by examining the explanatory role of essence in Posterior Analytics and Metaphysics Z 17

Reply to "Comment on 'Gravitating Magnetic Monopole in the Global Monopole Spacetime' "

In this Reply I present some arguments in favor of the stability of the topological defect composed by global and magnetic monopoles.Comment: 1 page, no figures. Revised version improves the theoretical analysis about electrostatic self-interaction in the global monopole spacetim

Lumps and P-branes in Open String Field Theory

We describe numerical methods for constructing lump solutions in open string field theory. According to Sen, these lumps represent lower dimensional Dp-Branes and numerical evaluation of their energy can be compared with the expected value for the tension. We take particular care of all higher derivative terms inherent in Witten's version of open string field theory. The importance of these terms for off shell phenomena is argued in the text. Detailed numerical calculations done for the case of general $p$ brane show very good agreement with Sen's conjectured value. This gives credence to the conjecture itself and establishes further the usefulness of Witten's version of SFT .Comment: 11 pages, 1 figure, 1 table; v2: small typos correcte