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The Growth Impact of Structural Reforms in Latin America. Another Look

  • Alessia LO TURCO


    (Universita' Politecnica delle Marche, Dipartimento di Economia)

Aim of this paper is to further investigate the growth effects of structural reforms in Latin America and the Caribbean (LAC). Although some work on the topic already exists this is based on dynamic panel data models where reforms are measured by means of the Reform Indexes, originally calculated by Lora et al.(1997) and then extended by Morley et al.(1999) for the period 1970-1995. Now, with much of the reform effort in LAC countries concentrated in the end of the 80s and in the beginning of the 90s, an empirical analysis with observations up to 1995 might not be enough for a correct detection of growth effects of structural reforms. Moreover, previous results might be driven by the estimation strategy too.;Within this frame, this paper tries to contribute in both ways. Firstly, an actualized version of the Reform Indexes(Escaith et al.(2003)) is used with observations up to 2000. Secondly, differently from previous studies, the estimation strategy is based on the adoption of Within Group estimator and Kiviet(1995) correction for Within Group estimator when, given the number of cross-section units, a shorter time dimension is at hand. Results are compared to estimates from Arellano and Bondo first difference estimator. Finally a sensitivity analysis is performed in order to check the robustness of results.

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Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 235.

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Length: 27
Date of creation: May 2005
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Handle: RePEc:anc:wpaper:235
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  1. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-63, September.
  2. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. "Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-89, September.
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  10. Fernandez-Arias, Eduardo & Montiel, Peter, 1997. "Reform and Growth in Latin America: All Pain, No Gain?," Working Papers 244236, Inter-American Development Bank.
  11. Stephen Bond & Anke Hoeffler & Jonathan Temple, 2001. "GMM Estimation of Empirical Growth Models," Economics Papers 2001-W21, Economics Group, Nuffield College, University of Oxford.
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  13. Eduardo Lora, 2001. "Structural reforms in Latin America: What has been reformed and how to measure it?," Research Department Publications 4287, Inter-American Development Bank, Research Department.
  14. Kiviet, Jan F., 1995. "On bias, inconsistency, and efficiency of various estimators in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 68(1), pages 53-78, July.
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  17. Frank Windmeijer, 2000. "A finite sample correction for the variance of linear two-step GMM estimators," IFS Working Papers W00/19, Institute for Fiscal Studies.
  18. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
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  20. Hofman, André A., 2000. "The economic development of Latin America in the twentieth century," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1650 edited by Eclac.
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  22. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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  24. Rivera-Batiz, Luis A & Xie, Danyang, 1992. "GATT, Trade, and Growth," American Economic Review, American Economic Association, vol. 82(2), pages 422-27, May.
  25. Escaith, Hubert & Morley, Samuel A., 2000. "The impact of structural reforms on growth in Latin America and the Caribbean: an empirical estimation," Macroeconomía del Desarrollo 1, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
  26. Richard Blundell & Steve Bond & Frank Windmeijer, 2000. "Estimation in dynamic panel data models: improving on the performance of the standard GMM estimator," IFS Working Papers W00/12, Institute for Fiscal Studies.
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