Abstract
The last decade has seen an explosion in research on the unit root component of output, producing contradictory conclusions as to the magnitude of output persistence. This divergence of opinion stems from the examination of different aspects of the first differences of output in order to detect deviations from white noise. This paper explores the time series properties of aggregate U.S. output in order to see whether the data are well described as a random walk with drift. Our testing methodology examines the shape of the spectral distribution function and thereby captures all second moment implications of the null. Our results indicate that there is little statistically significant evidence of mean reversion in output.
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