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Economic policy in central and eastern Europe : unit root consequences. (Polityka gospodarcza w Europie Środkowo-Wschodniej: konsekwencje pierwiastków jednostkowych)

Mazal, Lukas and Rowles, Kevin (2011) Economic policy in central and eastern Europe : unit root consequences. (Polityka gospodarcza w Europie Środkowo-Wschodniej: konsekwencje pierwiastków jednostkowych). Acta Scientiarum Polonorum. Oeconomia , 10 (1). pp. 57-68. ISSN 1644-0757

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    Abstract

    This article aims to provide an econometric justi cation for economic policy in
    the Central and Eastern European area by examining the stability of real GDP and industrial
    production in the Czech Republic, Slovakia, Poland, and Hungary. Stability of GDP and
    industrial production is examined by unit root tests. The Dickey-Fuller (1979) unit root
    test indicates unit root in case of all four outputs. In case of the industrial production, the
    results are mixed. Nonetheless, difference stationarity of the GDP implies that there is no
    deterministic time trend in GDP. Therefore, there is no short-run trend reversion. Deep and
    long recessions are not only possible but also even likely. Thus, actions of economic policy
    can be regarded as justi ed because they are desirable to boost economy in order to reverse
    these recessions. This study can also be regarded as an extension of unit root tests to the
    post communist countries.

    Item Type: Article
    Subjects: H Social Sciences > HB Economic Theory
    Schools: The Business School
    Related URLs:
    Depositing User: Sharon Beastall
    Date Deposited: 18 May 2011 09:27
    Last Modified: 18 May 2011 09:27
    URI: http://eprints.hud.ac.uk/id/eprint/10508

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