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Rates, Ratios And Per Capita Variables In International Models: Analysis Of Investment And Foreign Trade In Oecd Countries

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Author Info
GUISAN, Maria-Carmen ()

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Abstract

Some econometric models try to explain the rate of growth of real Gross Domestic Product per capita as a function or ratios like Investment/GDP or Exports/GDP, with confusing results and conclusions which are misleading when the studies do not show a positive impact of the explanatory variables. Some of these approaches are inspired in the Solow model which is indeed interesting at a theoretical level when the hypotheses of the model hold in one country for a short period of time, but some hypothesis of the model do not hold in long samples of a same country or in international comparisons. Usually economic growth of real GDP per capital increases with Investment per capita but the Investment/GDP ratio usually diminish with the increase of Investment per capita. In the vase of these two explanatory variables it is much more convenient and realistic to use real values per capita instead of ratios for the explanation of economic development. Besides we include other considerations of interest regarding international differences of Exports per capita among countries. We present data, graphs and estimations of interest in this regard for 25 OECD countries.

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Article provided by Euro-American Association of Economic Development in its journal International Journal of Applied Econometrics and Quantitative Studies .

Volume (Year): 5 (2008)
Issue (Month): 2 ()
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Handle: RePEc:eaa:ijaeqs:v:5:y2008:i:2_1

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Related research
Keywords: O51; O52; O54; O57;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Valadkhani, A., 2005. "Macroeconomic Modelling: Approaches and Experiences in Development Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 5(1). [Downloadable!]
  2. David Fielding, 1998. "A Structural Model of Social and Economic Development," Discussion Papers in Economics 99/1, Department of Economics, University of Leicester. [Downloadable!]
  3. Neira, Isabel, 2003. "Modelos econometricos de capital humano: Principales enfoques y evidencia empirica," Economic Development 64, University of Santiago de Compostela. Faculty of Economics and Business. Econometrics.. [Downloadable!]
  4. B. Bhaskara Rao & Rup Singh & Neelesh Gounder, 2007. "Investment ratio in growth equations," Applied Economics Letters, Taylor and Francis Journals, vol. 14(8), pages 565-568. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. DANIELE, Vittorio, 2009. "Development Policy, Public Spending and Regional Convergence in Italy (1996-2007)," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 9(2). [Downloadable!] (restricted)
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