International Science Community Association Research Journal of Mathematical and Statestical Sciences 2320 - 6047 1 5 2013 June 12 Restricted Testing Procedure and Modified Dickey-Fuller Test 17 20 EN Sunita Soni 1 Department of Mathematics, Govt. Model Science College, Jabalpur MP, INDIA Lalita Singh 2 Govt. Science College, Pandhuqna, MP, INDIA Manoj Kumar Shukla 3 Department of Mathematics, Govt. Model Science College, Jabalpur MP, INDIA Babulal Seal 1 Department of statistics, The University of Burdwan, West Bengal, INDIA Sanchayita Sadhu 2 Department of statistics, The University of Burdwan, West Bengal, INDIA Rinat Akter 1 Lecturer of Statistics, Department of Natural Science, Daffodil International University, Dhaka, BANGLADESH Ajit Kumar Majumder 2 Department of Statistics, Jahangirnagar University, Dhaka, BANGLADESH > Research Paper 2013 5 31 2013 June 12 Usual test of testing unit root such as Dickey-Fuller (DF) test, Augmented Dickey-Fuller (ADF) test, Phillips-Perron (PP) test and Kwiatkowski- Phillips-Schmidt-Shin (KPSS) test ignore sign and boundary parameters. Ignorance of these problems may results in unusual estimate and test results. This paper demonstrates the ignorance of sign and boundary of parameters and consequences in estimation and hypothesis test by Monte Carlo simulation. This work proposes a distance-based optimum solution for testing unit root subject to the restriction of boundary and sign problem. Monte Carlo simulation study shows that the proposed one-sided test of testing unit root performs better than the usual tests interms of power property Copyright@ International Science Community Association