Decomposing The Conditional Variance of Cross-Country Output
AbstractA well established fact in the growth empirics literature is the increasing variation in output per capita across countries. This phenomena however does not adequately describe changes in the distribution of output since it does not account for changes in the covariates which undoubtedly in influence per capita output levels. We propose a robust, nonparametric decomposition of the conditional variation of per capita output and find that OECD countries have experienced diminishing conditional variation while other regions have experienced increasing conditional variation. Our decomposition suggests that most of these changes in the conditional variance of output is due to unobserved factors not accounted for by the traditional growth determinants. In addition to this we show as these factors played very different roles over time and across regions.
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Bibliographic InfoPaper provided by University of Miami, Department of Economics in its series Working Papers with number 2011-18.
Length: 24 pages
Date of creation: 24 Dec 2011
Date of revision:
Publication status: Forthcoming: Working
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Generalized Kernel; Nonparametric; Conditional Variation;
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- G0 - Financial Economics - - General
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General
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