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A Refinement in the Specification of Empirical Macroeconomic Models as an Extension to the EBA Procedure


  • Edwards Jeffrey A

    () (North Carolina A & T State University)

  • Sams Alfred

    () (Texas Tech University)

  • Yang Benhua

    () (Texas Tech University)


Ross Levine and David Renelts (LR) paper [1992] investigate the robustness of the relationship between growth, investment, and variables of interest using Leamers [1985] Extreme Bounds Analysis (EBA). LR claim that few economic variables have a robust relationship with either long-run cross-country growth rates or investments share of GDP. As something resembling an extension of McAleer et al. [1985] and Hoover and Perez [2004], we use a battery of statistical tests to search for models that may be less subject to specification error. We conclude that there are alternative models based on LR that have better statistical properties as well as give rather different results.

Suggested Citation

  • Edwards Jeffrey A & Sams Alfred & Yang Benhua, 2006. "A Refinement in the Specification of Empirical Macroeconomic Models as an Extension to the EBA Procedure," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(2), pages 1-26, October.
  • Handle: RePEc:bpj:bejmac:v:topics.6:y:2006:i:2:n:13

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    References listed on IDEAS

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    5. Carlo Favero, 2005. "Consumption, Wealth, the Elasticity of Intertemporal Substitution and Long-Run Stock Market Returns," Working Papers 291, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    6. Beaudry, Paul & van Wincoop, Eric, 1996. "The Intertemporal Elasticity of Substitution: An Exploration Using a US Panel of State Data," Economica, London School of Economics and Political Science, vol. 63(251), pages 495-512, August.
    7. Taiji Harashima, 2005. "An Estimate of the Elasticity of Intertemporal Substitution in a Production Economy," Macroeconomics 0508030, EconWPA.
    8. Holger Strulik, 2005. "The Role of Human Capital and Population Growth in R&D-based Models of Economic Growth," Review of International Economics, Wiley Blackwell, vol. 13(1), pages 129-145, February.
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    Cited by:

    1. cole, Chip & Edwards, Jeffrey A., 2010. "Competition on MARS? A study of broker-dealer competition in the U.S. municipal auction rate securities market," MPRA Paper 36444, University Library of Munich, Germany.
    2. Edwards, Jeffrey A. & Kasibhatla, Krishna, 2009. "Dynamic heterogeneity in cross-country growth relationships," Economic Modelling, Elsevier, vol. 26(2), pages 445-455, March.
    3. Beck Thorsten & Büyükkarabacak Berrak & Rioja Felix K. & Valev Neven T., 2012. "Who Gets the Credit? And Does It Matter? Household vs. Firm Lending Across Countries," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-46, March.
    4. Jeffrey Edwards & Frank Thames, 2010. "Growth volatility and the interaction between economic and political development," Empirical Economics, Springer, vol. 39(1), pages 183-201, August.
    5. Neil R. Ericsson, 2008. "The Fragility of Sensitivity Analysis: An Encompassing Perspective," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(s1), pages 895-914, December.

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