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Growth Empirics Under Model Uncertainty

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  • Charalambos G. Tsangarides

Abstract

This paper attempts to identify robust patterns of cross-country growth behavior in the world as a whole and Africa. It employs a novel methodology that incorporates a dynamic panel estimator, and Bayesian Model Averaging to explicitly account for model uncertainty. The findings indicate that: (i) in addition to initial conditions, various economic factors such as higher investment, lower inflation, lower government consumption, better fiscal stance, improved political environment, exogenous terms-of-trade shocks, and fixed geographical factors are robustly correlated with growth; (ii) what is good for growth around the world is, in principle, also good for growth in Africa; and (iii) political and institutional variables are particularly important in explaining African growth.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 05/18.

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Length: 33
Date of creation: 01 Jan 2005
Date of revision:
Handle: RePEc:imf:imfwpa:05/18

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Related research

Keywords: Economic growth; Economic models; debt; probability; samples; debt service; external debt; logarithm; equation; statistics; probabilities; bayes factor; number of variables; sensitivity analysis; debt overhang; deficits; correlations; bayes factors; econometrics; number of regressors; debt relief; bayesian analysis; sampling; fiscal policy; repayment; probability model; debt stocks; survey; bayes ? theorem; bayesian information criterion; financial statistics; interest; standard deviation; finite sample; creditors; statistic; difference equation; goodness of fit; equations; exogenous factor; empirical model; experimental data; simultaneous equation; correlation; hypothesis testing; public expenditure; probability density; statistical significance; access to credit; sampling distribution; prediction; debt forgiveness; dummy variables; debt repayment; nonlinear relationship; surveys; liabilities; sample size; linear models; functional form; statistical theory;

This paper has been announced in the following NEP Reports:

References

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Citations

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Cited by:
  1. Gilles Dufrénot & Valérie Mignon & Charalambos Tsangarides, 2009. "The Trade-Growth Nexus in the Developing Countries: a Quantile Regression Approach," Working Papers 2009-04, CEPII research center.
  2. Enrique Moral-Benito, 2012. "Determinants of Economic Growth: A Bayesian Panel Data Approach," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 566-579, May.
  3. Ley, Eduardo & Steel, Mark F.J., 2007. "Jointness in Bayesian variable selection with applications to growth regression," Journal of Macroeconomics, Elsevier, vol. 29(3), pages 476-493, September.
  4. Chris Papageorgiou & Winford H. Masanjala, . "Initial Conditions, European Colonialism and Africa's Growth," Departmental Working Papers 2006-01, Department of Economics, Louisiana State University.
  5. Antonio Ciccone & Marek Jarociński, 2010. "Determinants of Economic Growth: Will Data Tell?," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 222-46, October.
  6. Ley, Eduardo & Steel, Mark F. J., 2007. "On the effect of prior assumptions in Bayesian model averaging with applications to growth regression," Policy Research Working Paper Series 4238, The World Bank.
  7. Bigsten, Arne, 2006. "Aid and Economic Development in Africa," Working Papers in Economics 237, University of Gothenburg, Department of Economics.
  8. Eduardo Ley & Mark F.J. Steel, 2009. "On the effect of prior assumptions in Bayesian model averaging with applications to growth regression This article was published online on 30 March 2009. An error was subsequently identified. This not," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(4), pages 651-674.
  9. Stefan Sperlich & Yvonne Sperlich, 2012. "Growth and Convergence in South–South Integration Areas: Empirical Evidence," Research Papers by the Department of Economics, University of Geneva 12032, Département des Sciences Économiques, Université de Genève.

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