Is Real GDP Stationary In The Advanced Economies? Evidence From An Unbalanced Panel Unit Root Test

Abstract

This study deals with the unit root hypothesis related to the real GDP (Gross Domestic Product) for 35 advanced economies, for the period of 1960 -2011. As it is known in the literature, when unit root analysis, which plays a significant role in specifying the macroeconomic time series’ resistance to policy alternatives, is made without considering the panel structure (and the findings of the existence of unit root have been achieved in many of such single stationarity studies), available data set diminishes the power and reliability of the test. Therefore it is necessary to search the existence of unit root with the panel-based method. The Im, Pesaran and Shin (1997, 2003 (revised version) panel unit root test, which allows the application of unit root analysis for heterogeneous panel, was implemented upon the advanced countries for the period in question, and the null hypothesis that panel members included unit root could not be refuted.