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Determinants of Economic Growth: Will Data Tell?

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  • Ciccone, Antonio
  • Jarocinski, Marek

Abstract

Many factors inhibiting and facilitating economic growth have been suggested. Will international income data tell which matter when all are treated symmetrically a priori? We find that growth determinants emerging from agnostic Bayesian model averaging and classical model selection procedures are sensitive to income differences across datasets. For example, many of the 1975-1996 growth determinants according to World Bank income data turn out to be irrelevant when using Penn World Table data instead (the WB adjusts for purchasing power using a slightly different methodology). And each revision of the 1960-1996 PWT income data brings substantial changes regarding growth determinants. We show that research based on stronger priors about potential growth determinants is more robust to imperfect international income data.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6544.

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Date of creation: Oct 2007
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Handle: RePEc:cpr:ceprdp:6544

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Keywords: growth regressions; robust growth determinants;

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