Is per capita real GDP stationary in African countries? Evidence from panel SURADF test

Abstract

This note uses the newly developed panel SURADF tests advanced by Breuer et al . (2001) to investigate the time-series properties of real GDP for 47 African countries for the period 1980 to 2004. While the other Panel-based unit root tests are joint tests of a unit root for all members of the panel and are incapable of determining the mix of I(0) and I(1) series in the panel setting, the Panel SURADF tests a separate unit-root null hypothesis for each individual panel member and, therefore identifies how many and which series in the panel are stationary processes. The empirical results from several panel-based unit root tests indicate that the per capita real GDP for all the countries studied are non-stationary, however, when Breuer et al .'s Panel SURADF tests are conducted, one finds unit root in per capita real GDP only exist in two-third of countries studied. These results have important policy implications for African countries.

Acknowledgements

The authors are grateful to Professor Myles S. Wallace and Dr Carrion-i-Silvestre who kindly provided the RATS and GAUSS program codes, respectively. Without their contributions, this paper would not have been done in the first place. The authors also thank an anonymous referee and the editor Professor Mark Taylor for their several helpful comments, suggestions and time spent in reading this paper. These all make this paper more valuable and readable. Any errors that remain are our own.