Are shocks to national income persistent? New global evidence

Abstract

Purpose

This paper aims to investigate the integrational properties of real GDP for 125 countries.

Design/methodology/approach

The paper applies the Kwiatkowski et al. univariate test and a KPSS‐type univariate test that accounts for multiple structural breaks – a test procedure proposed by Carrion‐i‐Silvestre et al. The panel versions of the KPSS‐type test, proposed by Carrion‐i‐Silvestre et al. with and without structural breaks, are also applied.

Findings

The paper finds that, while univariate tests with and without structural breaks provide mixed results on persistence, the panel test suggests that shocks to national output are persistent.

Originality/value

This is a multi‐country study that focuses on both developed and developing countries and uses more recent data to provide new and comparable evidence on the persistence of output.

Citation

Narayan, S. and Narayan, P.K. (2011), "Are shocks to national income persistent? New global evidence", Journal of Economic Studies, Vol. 38 No. 2, pp. 218-230. https://doi.org/10.1108/01443581111128433