Testing for a unit root in a process exhibiting a structural break in the presence of GARCH errors

This paper considers the effect of GARCH errors on the tests proposed byPerron (1997) for a unit root in the presence of a structural break. We assessthe impact of degeneracy and integratedness of the conditional varianceindividually and find that, apart from in the limit, the testing procedure isinsensitive to the degree of degeneracy but does exhibit an increasingover-sizing as the process becomes more integrated. When we consider the GARCHspecifications that we are likely to encounter in empirical research, we findthat the Perron tests are reasonably robust to the presence of GARCH and donot suffer from severe over-or under-rejection of a correct null hypothesis.

Flooding, resettlement and change in livelihoods: evidence from rural Mozambique

Post-disaster development policies, such as resettlement, can have major impacts on communities. This article concerns how and why people's livelihoods change as a result of resettlement, and what relocated people's views of such changes are, in the context of natural disasters. It presents two historically-grounded, comparative case studies of post-flood resettlement in rural Mozambique. The studies show a movement away from rain-fed subsistence agriculture towards commercial agriculture and non-agricultural activities. Ability to secure a viable livelihood was a major determinant of whether resettlers remained in their new locations or returned to the river valleys despite the risks that floods posed. The findings suggest that more research is required into 1) understanding why resettlers choose to stay in or abandon designated resettlement areas; 2) what is meant by 'voluntary' and 'involuntary' resettlement in the context of post-disaster reconstruction; and 3) what the policy drivers for resettlement are in developing countries.