GDP per Capita for West-Balkan Countries: Evidence from Linear and Nonlinear Unit Root Tests
GDP per Capita for West-Balkan Countries: Evidence from Linear and Nonlinear Unit Root Tests

Summary/Abstract: The purpose of the paper is to investigate whether the economic trends of the Western Balkans are characterized by stationarity, long-term stability or permanent structural disruptions. Furthermore, the purpose of the work is to analyze institutional impacts on development and identify sustainable development pathways, as well as to assess economic resilience after crises. For this purpose, we examine the stationarity of GDP per capita (adjusted for purchasing power parity-PPP) during the period 1990-2023. To achieve this goal, we apply both linear and nonlinear unit root tests, after first evaluating the series in linear and nonlinear terms. The results of the linear tests showed that the GDP per capita series at the variable levels have a unit root. Linear tests with structural breaks find evidence of stationarity in the levels of the variables in some of the Western Balkan countries. When nonlinear unit root tests are used (with and without structural breaks) we find stationarity in some of the countries we examine.

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