Skip to main content

An econometric analysis of the U.S. postwar G.N.P.


Whilst most developed countries have experienced stable economic conditions during the postwar period, the acceptance of the unit root null hypothesis implies wild fluctuations in the major economic variables over time. This paper investigates the sensitivity of the decisions to accept the unit root hypothesis to the specification of the trends underlying the U.S. postwar GNP and other macro-variables. In particular, the relationship between the nominal GNP and the resident population is found to be a non-linear one. The unit root null hypothesis can be firmly rejected when the conditional mean of the nominal GNP series is represented by a quadratic trend variable and the assumptions that changes in the price level and the resident population lead to equiproportionate changes in the GNP are not enforced on the data. The case of quarterly observations is also investigated for seasonally unadjusted and adjusted data.

This is a preview of subscription content, access via your institution.


  • Bhargava A (1985) On the specification of regression models in seasonal differences. Submitted for publication

  • Bhargava A (1986) On the theory of testing for unit roots in observed time series. Rev Econ Stud 53:369- 384

    Google Scholar 

  • Cox DR, Miller HD (1966) The theory of stochastic processes. Chapman and Hall, London

    Google Scholar 

  • Engle R, Granger CWJ (1987) Co-integration and error-correction: representation, estimation and testing. Econometrica 55:251–276

    Google Scholar 

  • Fuller WA (1976) Introduction to statistical time series. Wiley, New York

    Google Scholar 

  • Fuller WA, Hasza D, Goebel JJ (1981) Estimation of parameters of stochastic difference equations. Ann Stat 9:531–543

    Google Scholar 

  • Ghysels E (1990) Unit root tests and the statistical pitfalls of seasonal adjustment: the case of the U.S. post-war real GNP. J Business Econ Stat (to appear)

  • Kiefer J (1977) Conditional confidence statements and confidence estimators. J Am Stat Assoc 712:789–827

    Google Scholar 

  • Koerts J, Abrahamse APJ (1969) On the theory and applications of the general linear model. Rotterdam University Press, Rotterdam

    Google Scholar 

  • Lehmann EL (1952) Testing multiparameter hypotheses. Ann Math Stat 23:541–552

    Google Scholar 

  • Nelson CR, Plosser CI (1982) Trends and random walks in macroeconomic time series: some evidence and implications. J Monet Econ 10:139–162

    Google Scholar 

  • Nerlove M, Grether DM, Carvalho JL (1979) Analysis of economic time series. Academic Press, New York

    Google Scholar 

  • Sargan JD, Bhargava A (1983) Testing residuals from least squares regression for being generated by the Gaussian random walk. Econometrica 51:153–174

    Google Scholar 

  • Summers R, Heston A (1988) A new set of international comparisons of real product and prices for 130 countries, 1950–85. Rev Inc Wealth 34:1–25

    Google Scholar 

  • Wallis KF (1972) Testing for fourth order autocorrelation in quarterly regression equations. Econometrica 40:617–636

    Google Scholar 

  • Wallis KF (1974) Seasonal adjustment and relations between variables. J Am Stat Assoc 69:18–31

    Google Scholar 

Download references

Author information

Authors and Affiliations


Additional information

The author is indebted to two anonymous referees and the Managing Editor for helpful comments.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Bhargava, A. An econometric analysis of the U.S. postwar G.N.P.. J Popul Econ 3, 147–156 (1990).

Download citation

  • Received:

  • Accepted:

  • Issue Date:

  • DOI:


  • Null Hypothesis
  • Develop Country
  • Economic Condition
  • Unit Root
  • Price Level