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The Catch-up Effect of Economic Growth. Evidence from the European Countries

Author

Listed:
  • Meral KAGITCI

    (The Bucharest University of Economic Studies, Finance Department.)

  • Leonardo BADEA

    (West University of Timișoara)

  • Vasile Cosmin NICULA

    (Romanian Court of Accounts.)

Abstract

Using a sample of thirteen European countries (cohesion countries) during twenty-one years, from 2000 to 2020, we employ a Quantile Regression approach to investigate the catch-up effect for the economic growth. According to the reported results, the catch-up effect appears to be more pronounced at the lower end of the conditional economic growth distribution, but also when economic growth is on an upward trend. The results remain robust to a different econometric specification. Additionally, foreign direct investments exhibit a higher impact on economic growth across superior quantile as compared to the lower ones. The impact is also statistically significant irrespective of the selected quantile. The same conclusion is valid for the Political Stability Index, the positive relationship indicating that economic growth is extremely sensitive to political events.

Suggested Citation

  • Meral KAGITCI & Leonardo BADEA & Vasile Cosmin NICULA, 2021. "The Catch-up Effect of Economic Growth. Evidence from the European Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 76-86, December.
    • Handle: RePEc:rjr:romjef:v::y:2021:i:4:p:76-86
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    More about this item

    Keywords

    catch–up effect; quantile regression; panel data analysis;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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