Determining whether per capita output can be characterized by a stochastic trend is complicated by the fact that infrequent breaks in trend can bias standard unit root tests towards nonrejection of the unit root hypothesis. The bulk of the existing literature has focused on the application of...

We propose a new pooled panel unit root test allowing for serial and contemporaneous correlation. The test combines Elliott et al. (1996) local-to-unity transformation with a pooled panel ADF test, and accounts for contemporaneous correlation by estimating the residual covariance matrix. The...