This paper provides evidence on the unit root hypothesis and long-term growth by allowing for two structural breaks. We reject the unit root hypothesis for three-quarters of the countries approximately 50% more rejections than in models that allow for only one break. While about half of the...

Several recent papers conclude that U.S. real GDP is trend stationary, implying that all shocks are transitory and the long run path is deterministic. These inferences fail to take into account two problems: the distortion of test size in finite samples due to data-based model selection and the...

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 non-rejection of the unit root hypothesis. The bulk of the existing literature has focused on the application of...