Studies on DGP of Chinese Household Consumption

摘要

If structural change lies in nonstationary time series, the traditional unit root tests will draw false statistical inference. The paper applies ADF test allowing for one structural break to test DGP of Chinese household consumption. We find the series can be more accurately characterized as a segmented trend stationary process around one structural break as opposed to a stochastic unit root process. The conclusion suggests that long-run economic growth strategy can change the growth path of household consumption and short-run stabilization policies deserve to apply.