Cleaning Up the Kitchen Sink: Growth Empirics When the World Is Not Simple
AbstractThis paper explores the relevance of unknown nonlinearities for growth empirics. Recent theoretical contributions and case-study evidence suggest that nonlinearities are pervasive in the growth process. I show that the postwar data provide strong evidence in favor of generalized non-linearities. I provide two alternative mechanisms for making inference about the effects of production-function shifters on growth that do not make a priori assumptions about functional form: monotonicity tests and average derivative estimation. The results of these tests point towards a greater role for structural variables and a smaller role for policy variables than the linear model.
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Bibliographic InfoPaper provided by Wesleyan University, Department of Economics in its series Wesleyan Economics Working Papers with number 2006-004.
Length: 41 pages
Date of creation: Jan 2006
Date of revision: 17 May 2007
Note: Earlier version "Cleaning Up the Kitchen Sink: On the Consequences of the Linearity Assumption for Cross-Country Growth Empirics" available at http://repec.wesleyan.edu/pdf/frrodriguez/2006004a_rodriguez.pdf
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Economic Growth; Cross-Country Growth Regressions; Non-linearities; Non-parametric econometrics;
Find related papers by JEL classification:
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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