The Endogeneity of the Natural Rate of Growth – an Empirical Study for Latin-American Countries
AbstractThe aim of this paper is to analyse the sensitivity of the natural rate of growth to the actual rate of growth for a sample of eleven Latin-American countries, assuming the natural rate to be determined endogenously by changes in the actual rate of growth. The natural rates of growth are estimated in a system of SUR estimations over the period 1986-2003. In order to determine whether they react endogenously to changes in the actual rate of growth, a dummy variable for boom periods is added to the system of regressions. In the second part of the empirical analysis, the direction of causality between input growth and output growth is then tested for four of the countries in the first sample. The results confirm not only the hypothesis about the endogeneity of the natural rate of growth, but also show causality from output growth to input growth to be much stronger than the reverse. Length: 28 pages
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Bibliographic InfoPaper provided by Hamburg University, Department Wirtschaft und Politik in its series Macroeconomics and Finance Series with number 200704.
Date of creation: Apr 2007
Date of revision:
Natural rate of growth; actual rate of growth; endogeneity; Granger causality; Latin America;
Other versions of this item:
- Lena Vogel, 2009. "The endogeneity of the natural rate of growth - an empirical study for Latin-American countries," International Review of Applied Economics, Taylor and Francis Journals, vol. 23(1), pages 41-53.
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-28 (All new papers)
- NEP-CBA-2007-04-28 (Central Banking)
- NEP-DEV-2007-04-28 (Development)
- NEP-MAC-2007-04-28 (Macroeconomics)
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