Is Germany's GDP Trend-Stationary? A Measurement-with-Theory Approach

@article{Lucke2002IsGG,
  title={Is Germany's GDP Trend-Stationary? A Measurement-with-Theory Approach},
  author={Bernd Lucke},
  journal={Behavioral \& Experimental Economics},
  year={2002}
}
  • Bernd Lucke
  • Published 8 December 2005
  • Mathematics, Economics
  • Behavioral & Experimental Economics
The time series properties of German GDP have been re-examined in recent research. Extending the sample to include GDP data from 1950 onwards, some researchers argued in favor of a trend-stationary rather than difference stationary representation of real log GDP. We show that this conclusion is based on an atheoretic trend model underlying the unit root tests. A simple linear trend model fails to take the post World-War II catch-up process properly into account. We use the Solow growth model to… 
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