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Bayesian Model Averaging in Modelling GDP Convergence with the Use of Panel Data

Author

Listed:
  • Mariusz Próchniak

    (Szkoła Główna Handlowa w Warszawie)

  • Bartosz Witkowski

    (Szkoła Główna Handlowa w Warszawie)

Abstract

In this paper, β convergence analysis for the 27 EU member countries and the 1993-2010 period is conducted. The analysis uses an Bayesian model averaging (BMA) approach applied to Blundell and Bond’s GMM system estimator with the existence of structural breaks. In order to account for the differences in the steady-states of the countries, 22 variables are tested as potential economic growth determinants. The structural breaks are expected to be in 1998 and 2004. The main finding is that the EU27 countries converged at the rate of about 5% per annum which is an enormous difference as compared with the widely cited 2% speed of convergence and the mechanism of conditional convergence was rather constant over time yet the influence of particular growth factors on GDP proved not to be stable anymore.

Suggested Citation

  • Mariusz Próchniak & Bartosz Witkowski, 2012. "Bayesian Model Averaging in Modelling GDP Convergence with the Use of Panel Data," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 26, pages 45-60.
    • Handle: RePEc:sgh:annals:i:26:y:2012:p:45-60
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    References listed on IDEAS

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    Cited by:

    1. Michał Bernardelli, 2013. "Nieklasyczne modele Markowa w analizie cykli koniunktury gospodarczej w Polsce," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 30, pages 59-74.
    2. Łukasz Goczek & Ewa Witkowska & Bartosz Witkowski, 2021. "How Does Education Quality Affect Economic Growth?," Sustainability, MDPI, vol. 13(11), pages 1-22, June.
    3. Forson, Joseph Ato & Opoku, Rosemary Afrakomah & Peng, Zhen, 2017. "Innovation, Institutions and Economic Growth in Sub-Sahara Africa – an IV Estimation of a Panel Threshold Model," MPRA Paper 103063, University Library of Munich, Germany, revised 15 Mar 2018.
    4. Goczek, Łukasz & Witkowski, Bartosz, 2023. "Spillover effects of the unconventional monetary policy of the European Central Bank," The Quarterly Review of Economics and Finance, Elsevier, vol. 89(C), pages 82-104.

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    More about this item

    Keywords

    convergence; economic growth; growth factors; bayesian averaging;
    All these keywords.

    JEL classification:

    • 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
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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