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Are Real GDP Levels Nonstationary? Evidence from Panel Data Tests
Author(s) -
Rapach David E.
Publication year - 2002
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.2002.tb00433.x
Subject(s) - unit root , real gross domestic product , economics , econometrics , unit root test , per capita , panel data , gross domestic product , unit (ring theory) , macroeconomics , cointegration , mathematics , population , demography , mathematics education , sociology
Ever since the seminal paper of Nelson and Plosser (1982), researchers have focused on the potential nonstationarity of important macroeconomic variables, and unit root tests are now a standard procedure in empirical analyses. While there are many findings of unit roots in macroeconomic variables using the popular augmented Dickey and Fuller (1979) test, this test has low power against near‐unit‐root alternatives. Recently, panel data procedures have been proposed as an avenue to increased power. This paper applies panel unit root tests to international real GDP and real GDP per capita data. The results overwhelmingly indicate that international real GDP and real GDP per capita levels are nonstationary.