Mean Reversion of Balance of Payments：Evidence from Sequential Trend Break Unit Root Tests

Abstract

We analyze the G7 countries data set of real balance of payments series. The unit root tests\r\nwith an endogenously determined break date in the trend function proposed by Zivot and\r\nAndrews (1992) is employed to characterize the balance of payments series. The empirical\r\nresults show that allowing for a break in the trend function could alter the outcome of the\r\nstandard unit root tests for some series.