Restricted Structural Breaks Models And Unit Root Test In Panel Data

An important issue in economics involves structural breaks and unit root tests in panel data, the combination of the two theories will be hot issue. The research in this area is still in its infancy stage, the use of panel data deepening structural break has important theoretical and practical significance. This paper focus on using the three restricted structural break models(restricting intercept and trend) with unit root tests in panel data for analyzing tertiary industry GDP in China, which will accumulate empirical experience to test whether China's macroeconomic variables with structural breaks is trend stationarity or not.In examining the restricted structural breaks models, this paper uses eviews to Monte Carlo simulation, and provides the critical values for the three models, which is a preliminary base for testing macroeconomic series. The most important innovation is that based on the three models, firstly de-trending macroeconomic panel data, then using unit root tests in panel data. The combination of the two theories will not only improve unit root size and power, but also help us judge macroeconomic variables trend stationarity from a new perspective.Empirical research found that since China is a large country and the region's economic development is uneven, so the break points are different in different provinces, but the restricted structural breaks models are effective as a whole, then confirms that the unit root test in panel data can increase size and power.