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Is Per Capita Real GDP Stationary in Latin American Countries? Evidence from a Panel Stationary Test with Structural Breaks

  • Tsangyao Chang

    ()

    (Department of Finance, Feng Chia University, Taichung, Taiwan)

  • Wen-Chi Liu

    ()

    (Department of Business Administration, Da Yeh University, Changhua, Taiwan)

  • Shu-Chen Kang

    ()

    (Department of Accounting, Feng Chia University, Taichung, Taiwan)

  • Kuei-Chiu Lee

    ()

    (Department of Cooperative Economics, Feng Chia University, Taichung, Taiwan.)

In this note, we use the newly-developed and refined panel stationary test with structural breaks, as advanced by Carrion-i-Silvestre et al. (2005), to investigate the time-series properties of per capita real GDP for 20 Latin American countries during the 1960-2000 period. The empirical results from numerous earlier panel-based unit root tests which do not take structural breaks into account indicate that the per capita real GDP for all the countries we study here are non-stationary but when we employ Carrion-i-Silvestre et al.¡¦s (2005) panel stationary test with structural breaks, we find the null hypothesis of stationarity in per capita real GDP can not be rejected for any of the 20 countries.

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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 3 (2008)
Issue (Month): 31 ()
Pages: 1-12

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Handle: RePEc:ebl:ecbull:eb-07c30088
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  1. Kaddour Hadri, 1999. "Testing For Stationarity In Heterogeneous Panel Data," Research Papers 1999_04, University of Liverpool Management School.
  2. Josep Lluis Carrion Silvestre & Tomas del Barrio Castro & Enrique Lopez Bazo, 2003. "Breaking the panels. An application to the GDP per capita," Working Papers in Economics 97, Universitat de Barcelona. Espai de Recerca en Economia.
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  8. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
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  10. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
  11. Fleissig, Adrian R. & Strauss, Jack, 1999. "Is OECD real per capita GDP trend or difference stationary? Evidence from panel unit root tests," Journal of Macroeconomics, Elsevier, vol. 21(4), pages 673-689.
  12. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
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  15. Carrion-i-Silvestre, Josep Lluis, 2005. "Health care expenditure and GDP: Are they broken stationary?," Journal of Health Economics, Elsevier, vol. 24(5), pages 839-854, September.
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