Summary The effects on the distribution of least‐squares residuals of a series of model mis‐specifications are considered. It is shown that for a variety of specification errors the distributions of the least‐squares residuals are normal, but with non‐zero means. An alternative predictor of the disturbance vector is used in developing four procedures for testing for the presence of specification error. The specification errors considered are omitted variables, incorrect functional form, simultaneous equation problems and heteroskedasticity.

No abstract

In this paper I review what insights we have gained about economic and financial relationships from the use of wavelets and speculate on what further insights we may gain in the future. Wavelets are treated as a "lens" that enables the researcher to explore relationships that previously were unobservable.

No abstract