Testing linear cointegration against smooth-transition cointegration

This paper studies a smooth-transition (ST) type cointegration. The proposed ST cointegration allows for regime switching structure in a cointegrated system. It nests the linear cointegration developed by Engle and Granger (1987) and the threshold cointegration studied by Balke and Fomby (1997). We develop F-type tests to examine linear cointegration against ST cointegration in ST-type cointegrating regression models with or without time trends. The null asymptotic distributions of the tests are derived with stationary transition variables in ST cointegrating regression models. And it is shown that our tests have nonstandard limiting distributions expressed in terms of standard Brownian motion when regressors are pure random walks, while have standard asymptotic distributions when regressors contain random walks with nonzero drift. Finite-sample distributions of those tests are studied by Monto Carlo simulations. The small-sample performance of the tests states that our F-type tests have a better power when the system contains ST cointegration than when the system is linearly cointegrated. An empirical example for the purchasing power parity (PPP) data (monthly US dollar, Italy lira and dollar-lira exchange rate from 1973:01 to 1989:10) is illustrated by applying the testing procedures in this paper. It is found that there is no linear cointegration in the system, but there exits the ST-type cointegration in the PPP data.

Independent Domain of Symmetric Encryption using Least SignificantBit : Computer Vision, Steganography and Cryptography Techniques

The rapid development of data transfer through internet made it easier to send the data accurate and faster to the destination. There are many transmission media to transfer the data to destination like e-mails; at the same time it is may be easier to modify and misuse the valuable information through hacking. So, in order to transfer the data securely to the destination without any modifications, there are many approaches like cryptography and steganography. This paper deals with the image steganography as well as with the different security issues, general overview of cryptography, steganography and digital watermarking approaches.  The problem of copyright violation of multimedia data has increased due to the enormous growth of computer networks that provides fast and error free transmission of any unauthorized duplicate and possibly manipulated copy of multimedia information. In order to be effective for copyright protection, digital watermark must be robust which are difficult to remove from the object in which they are embedded despite a variety of possible attacks. The message to be send safe and secure, we use watermarking. We use invisible watermarking to embed the message using LSB (Least Significant Bit) steganographic technique. The standard LSB technique embed the message in every pixel, but my contribution for this proposed watermarking, works with the hint for embedding the message only on the image edges alone. If the hacker knows that the system uses LSB technique also, it cannot decrypt correct message. To make my system robust and secure, we added cryptography algorithm as Vigenere square. Whereas the message is transmitted in cipher text and its added advantage to the proposed system. The standard Vigenere square algorithm works with either lower case or upper case. The proposed cryptography algorithm is Vigenere square with extension of numbers also. We can keep the crypto key with combination of characters and numbers. So by using these modifications and updating in this existing algorithm and combination of cryptography and steganography method we develop a secure and strong watermarking method. Performance of this watermarking scheme has been analyzed by evaluating the robustness of the algorithm with PSNR (Peak Signal to Noise Ratio) and MSE (Mean Square Error) against the quality of the image for large amount of data. While coming to see results of the proposed encryption, higher value of 89dB of PSNR with small value of MSE is 0.0017. Then it seems the proposed watermarking system is secure and robust for hiding secure information in any digital system, because this system collect the properties of both steganography and cryptography sciences.