Are real GDP levels nonstationary across Central and Eastern European countries?
AbstractThis study applies the Sequential Panel Selection Method (SPSM) proposed by Chortareas and Kapetanios (2009) to investigate and assess the non-stationary properties of whether real GDP follows a trend stationary or a difference stationary process for Central Eastern European (CEE) countries. SPSM can classify the whole panel into a group of stationary series and a group of non-stationary series. We clearly identify how many and which series in the panel are stationary processes and provide robust evidence clearly indicating that per capita real GDP for CEE countries holds stationary for three countries. Our findings point out their per capita real GDP convergence is a mean reversion towards equilibrium values in a non-linear way. Our results have important policy implications for macroeconomic policy, modeling, testing and forecasting for these CEE countries under study.
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Bibliographic InfoArticle provided by Baltic International Centre for Economic Policy Studies in its journal Baltic Journal of Economics.
Volume (Year): 13 (2013)
Issue (Month): 1 (July)
Per Capita Real GDP; Sequential Panel Selection Method; Fourier Function; Structural Change;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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