How to apply the novel dynamic ARDL simulations (dynardl) and Kernel-based regularized least squares (krls)
Peer reviewed, Journal article
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Original versionSarkodie, S. A. & Owusu, P. A. (2020). How to apply the novel dynamic ARDL simulations (dynardl) and Kernel-based regularized least sqaures (krls). MethodsX, 7: 101160. doi: 10.1016/j.mex.2020.101160
The application of dynamic Autoregressive Distributed Lag (dynardl) simulations and Kernel-based Regularized Least Squares (krls) to time series data is gradually gaining recognition in energy, environmental and health economics. The Kernel-based Regularized Least Squares technique is a simplified machine learning-based algorithm with strength in its interpretation and accounting for heterogeneity, additivity and nonlinear effects. The novel dynamic ARDL Simulations algorithm is useful for testing cointegration, long and short-run equilibrium relationships in both levels and differences. Advantageously, the novel dynamic ARDL Simulations has visualization interface to examine the possible counterfactual change in the desired variable based on the notion of ceteris paribus. Thus, the novel dynamic ARDL Simulations and Kernel-based Regularized Least Squares techniques are useful and improved time series techniques for policy formulation. • We customize ARDL and dynamic simulated ARDL by adding plot estimates with confidence intervals. • A step-by-step procedure of applying ARDL, dynamic ARDL Simulations and Kernel-based Regularized Least Squares is provided. • All techniques are applied to examine the economic effect of denuclearization in Switzerland by 2034.