This paper reconsiders the theoretical foundations of EU regional policy in economics. It begins with a discussion of the line of thought of its prevalent explanation in equilibrium economics which is focusing on market failures as its key underpinning and which is the major toolkit of...

This paper develops new tests of the unit root hypothesis based on instrumental variables estimation. The tests are asymptotically valid in the presence of moving average errors and they are quite accurate in finite samples. They are more powerful against stationary alternatives than other tests...