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Stability of long-run growth in East Asian countries: New evidence from panel stationarity test with structural breaks

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  • Omid Ranjbar
  • Xiao-Lin Li
  • Tsangyao Chang
  • Chien-Chiang Lee

Abstract

This paper investigates the stability of the steady-state growth process in East Asian region using a novel panel stationarity test, which allows us to control for (a) unobserved heterogeneity in form and date of potential structural breaks in a trend function, (b) the cross-sectional dependence among countries in the panel bootstrapping methods, and (c) the serially correlated errors. Evidence shows that a large majority of countries exhibit slowdowns in economic growth after their structural breaks and thus could not recover from negative shocks and return original balanced growth path.

Suggested Citation

  • Omid Ranjbar & Xiao-Lin Li & Tsangyao Chang & Chien-Chiang Lee, 2015. "Stability of long-run growth in East Asian countries: New evidence from panel stationarity test with structural breaks," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(4), pages 570-589, June.
    • Handle: RePEc:taf:jitecd:v:24:y:2015:i:4:p:570-589
    DOI: 10.1080/09638199.2014.937352
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