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Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach

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  • Xavier Sala-I-Martin
  • Gernot Doppelhofer
  • Ronald I. Miller

Abstract

This paper examines the robustness of explanatory variables in cross-country economic growth regressions. It introduces and employs a novel approach, Bayesian Averaging of Classical Estimates (BACE), which constructs estimates by averaging OLS coefficients across models. The weights given to individual regressions have a Bayesian justification similar to the Schwarz model selection criterion. Of 67 explanatory variables we find 18 to be significantly and robustly partially correlated with long-term growth and another three variables to be marginally related. The strongest evidence is for the relative price of investment, primary school enrollment, and the initial level of real GDP per capita.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/0002828042002570
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File URL: http://www.aeaweb.org/aer/data/sept04_bace_data.zip
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 94 (2004)
Issue (Month): 4 (September)
Pages: 813-835

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Handle: RePEc:aea:aecrev:v:94:y:2004:i:4:p:813-835

Note: DOI: 10.1257/0002828042002570
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References

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  1. J. Bradford De Long & Lawrence H. Summers, . "Equipment Investment and Economic Growth," J. Bradford De Long's Working Papers _122, University of California at Berkeley, Economics Department.
  2. Carmen Fernandez & Eduardo Ley & Mark Steel, 1999. "Model uncertainty in cross-country growth regressions," Econometrics 9903003, EconWPA, revised 06 Oct 2001.
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  6. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. " Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-89, September.
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  8. Granger, Clive W. J. & Uhlig, Harald F., 1990. "Reasonable extreme-bounds analysis," Journal of Econometrics, Elsevier, vol. 44(1-2), pages 159-170.
  9. Xavier X. Sala-i-Martin, 1997. "I Just Ran Four Million Regressions," NBER Working Papers 6252, National Bureau of Economic Research, Inc.
  10. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
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  15. John F. Geweke, 1994. "Bayesian comparison of econometric models," Working Papers 532, Federal Reserve Bank of Minneapolis.
  16. repec:umd:umdeco:rodriguez9901 is not listed on IDEAS
  17. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
  18. Robert E. Hall & Charles I. Jones, . "The Productivity of Nations," Working Papers 96012, Stanford University, Department of Economics.
  19. King, Robert G. & Levine, Ross, 1993. "Finance, entrepreneurship and growth: Theory and evidence," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 513-542, December.
  20. Leamer, Edward E, 1985. "Sensitivity Analyses Would Help," American Economic Review, American Economic Association, vol. 75(3), pages 308-13, June.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Democracia y crecimiento económico volátil (Por David Cuberes)
    by Jesús Fernández-Villaverde in Nada Es Gratis on 2011-02-09 07:00:07
  2. Why thereâ??s no â??GrowthGate:â? Frustration vs. Chicanery in Explaining Growth
    by William Easterly in Aid Watch on 2009-12-10 05:01:50
  3. Did Nations that Boosted Education Grow Faster? , by Garett Jones
    by ? in Econlog on 2012-10-29 09:36:20
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