DETERMINISTIC, STOCHASTIC, AND SEGMENTED TRENDS IN AGGREGATE OUTPUT: A CROSS-COUNTRY ANALYSIS

Publisher Website
Google Scholar
Abstract
This paper examines whether output per capita in 126 countries is better described as trend or difference stationary, using appropriate finite-sample critical values. Depending upon whether one uses solely a test with a trend stationary null, or solely one with a difference stationary null, very different conclusions are obtained. This outcome suggests that it is useful to consider the tests complementary, rather than competing. We find that when a definite characterization of GDP can be made, it is very likely to indicate a difference stationary process. However, the likelihood of making definite conclusions does vary positively with both income level and data quality.

This publication has 0 references indexed in Scilit: