New unit root test revolutionizes trend analysis in economic forecasting!
A new test has been developed to check for a unit root in data with trends, improving upon existing methods. This test is based on a different approach that allows for trends in both the null and alternative scenarios without unnecessary parameters. The test is derived from the score or LM principle and assumes errors are normally distributed, but it can work with other error assumptions as well. Two versions of the test have been created - a coefficient test and a t-test.