On unit root testing with smooth transitions

Improved critical values are calculated for Dickey–Fuller-type tt ratio unit root tests against trend stationarity about non-linear trend, which is based on one deterministic smooth transition (STR) function. Simulation employs fine grid-search over both STR parameters to find accurate staring values, as well as constrained optimization. In addition, two new parsimonious models are introduced. Finally, an application of the test to the log of Real per capita GNP of USA is provided.