SUMMARY This paper develops a long‐run output relation for a major oil‐exporting economy where the oil income‐to‐output ratio remains sufficiently high over a prolonged period. It extends the stochastic growth model developed in Binder and Pesaran (1999) by including oil exports as an...

A number of panel unit root tests that allow for cross-section dependence have been proposed in the literature that use orthogonalization type procedures to asymptotically eliminate the cross-dependence of the series before standard panel unit root tests are applied to the transformed series. In...

This paper presents a quarterly global model combining individual country vector error-correcting models in which the domestic variables are related to the country-specific foreign variables. The global VAR (GVAR) model is estimated for 26 countries, the euro area being treated as a single...

The papers included in this special issue are primarily concerned with the problem of cross section dependence and heterogeneity in the analysis of panel data models and their relevance in applied econometric research. Cross section dependence can arise due to spatial or spill over effects, or...