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The Determinants Of U.S. State Economic Growth: A Less Extreme Bounds Analysis

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  • W. ROBERT REED

Abstract

"This study investigates U.S. state economic growth from 1970 to 1999. I innovate on previous studies by developing a new approach for addressing "model uncertainty" issues associated with estimating growth equations. My approach borrows from the "extreme bounds analysis" approach of Leamer while also addressing concerns raised by Granger and Uhlig, Sala-i-Martin, and others that not all specifications are equally likely to be true. I then apply this approach to identify "robust" determinants of state economic growth. My analysis confirms the importance of productivity characteristics of the labor force and industrial composition of a state's economy. I also find that policy variables such as (1) size and structure of government and (2) taxation are robust and economically important determinants of state economic growth." ("JEL" 040, 051, H10, H20, H30, H70, R11, R58, C51) Copyright (c) 2008 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 47 (2009)
Issue (Month): 4 (October)
Pages: 685-700

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Handle: RePEc:bla:ecinqu:v:47:y:2009:i:4:p:685-700

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Cited by:
  1. Norman Baldwin & Stephen Borrelli, 2008. "Education and economic growth in the United States: cross-national applications for an intra-national path analysis," Policy Sciences, Springer, vol. 41(3), pages 183-204, September.
  2. Norman Gemmell & Richard Kneller & Ismael Sanz, 2011. "The Timing and Persistence of Fiscal Policy Impacts on Growth: Evidence from OECD Countries," Economic Journal, Royal Economic Society, vol. 121(550), pages F33-F58, February.
  3. James Alm & Janet Rogers, 2011. "Do State Fiscal Policies Affect State Economic Growth?," Working Papers 1107, Tulane University, Department of Economics.
  4. Nivedita Mukherji & Jonathan Silberman, 2011. "Idea generation: the performance of U.S. States 1997–2007," The Journal of Technology Transfer, Springer, vol. 36(4), pages 417-447, August.

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