Determinants of Economic Growth: A Bayesian Panel Data Approach
AbstractModel uncertainty hampers consensus on the key determinants of economic growth. Some recent cross-country, cross-sectional analyses have employed Bayesian Model Averaging to address the issue of model uncertainty. This paper extends that approach to panel data models with country-specific fixed effects. The empirical results show that the most robust growth determinants are the price of investment goods, distance to major world cities, and political rights. This suggests that growth-promoting policy strategies should aim to reduce taxes and distortions that raise the prices of investment goods; improve access to international markets; and promote democracy-enhancing institutional reforms. Moreover, the empirical results are robust to different prior assumptions on expected model size.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4830.
Length: 33 pages
Date of creation: 01 Jan 2009
Date of revision:
accounting; Average growth; Average growth rate; benchmark; calculations; capital accumulation; civil liberties; conditional convergence; Contribution; convergence parameter; country regressions;
Other versions of this item:
- 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.
- Enrique Moral-Benito, 2007. "Determinants Of Economic Growth: A Bayesian Panel Data Approach," Working Papers wp2007_0719, CEMFI.
- Enrique Moral-Benito, 2010. "Determinants of economic growth: A Bayesian panel data approach," Banco de Espaï¿½a Working Papers 1031, Banco de Espa�a.
- C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-02-14 (All new papers)
- NEP-DEV-2009-02-14 (Development)
- NEP-FDG-2009-02-14 (Financial Development & Growth)
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