Using panel data to increase the power of modified unit root tests in the presence of structural breaks
When testing for unit roots using the Dickey-Fuller test, the presence of structural breaks can cause serious size distortions to the test. Previous research has suggested two modified tests, the weighted symmetric and the recursively mean-adjusted test, that has robust size properties even in the presence of a structural break. However, recent findings have shown that the power of the two modifie
