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Testing the augmented Solow Model

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Author Info
Jonathan Temple

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Abstract

This paper examines the adequacy of the augmented Solow model for explaining international variation in the standard of living and growth rates. Robust estimation and measurement error diagnostics are used to assess the model in a variety of dimensions. The main findings are that the speed of conditional convergence is highly uncertain, that technology parameters obtained from the augmented Solow model cannot be trusted, and that the model does not work well when attention is restricted to either the OECD or developing countries. Not only that, the equation for steady state human capital is rejected by the data.

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File URL: http://www.nuff.ox.ac.uk/economics_wp/w18/testsol.zip
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Paper provided by Economics Group, Nuffield College, University of Oxford in its series Economics Papers with number 18 & 106..

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Date of creation: Nov 1995
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Handle: RePEc:nuf:econwp:0018

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Web page: http://www.nuff.ox.ac.uk/economics/

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Keywords: growth; development; convergence; human capital;

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  19. Simon, Herbert A, 1979. " On Parsimonious Explanations of Production Relations," Scandinavian Journal of Economics, Blackwell Publishing, vol. 81(4), pages 459-74.
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  22. Paul M. Romer, 1989. "Human Capital And Growth: Theory and Evidence," NBER Working Papers 3173, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  28. KOOPÊ , Gary & OSIEWALSKIÊ, Jacek & STEELÊ, MarkÊ, 1995. "The Components of Output Growth : A Cross-Country Analysis," CORE Discussion Papers 1995003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  30. Romer, Paul M., 1990. "Human capital and growth: Theory and evidence," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 32(1), pages 251-286, January. [Downloadable!] (restricted)
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