Are real GDP levels nonstationary across Central and Eastern European countries?

Pei-Long Shen (), Chih-Wei Su () and Hsu-Ling Chang ()
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Pei-Long Shen: Shanxi University of Finance and Economics
Chih-Wei Su: Shanxi University of Finance and Economics
Hsu-Ling Chang: Ling Tung University

Baltic Journal of Economics, 2013, vol. 13, issue 1, 99-108

Abstract: This 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.

Keywords: Per Capita Real GDP; Sequential Panel Selection Method; Fourier Function; Structural Change (search for similar items in EconPapers)
JEL-codes: C23 O1 O4 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:bic:journl:v:13:y:2013:i:1:p:99-108

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