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Jointness of Growth Determinants

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  • Doppelhofer, G.
  • Weeks, M.

Abstract

Model uncertainty arises from uncertainty about correct economic theories, data issues and empirical specification problems. This paper investigates mutual dependence or jointness among variables in explaining the dependent variable. Jointness departs from univariate measures of variable importance, while addressing model uncertainty and allowing for generally unknown forms of dependence. Positive jointness implies that regressors are complements, representing distinct, but interacting economic factors. Negative jointness implies that explanatory variables are substitutes and act as proxies for a similar underlying mechanism. In a cross-country dataset, we show that jointness among 67 determinants of growth is important, ffecting inference and economic policy.

Suggested Citation

  • Doppelhofer, G. & Weeks, M., 2005. "Jointness of Growth Determinants," Cambridge Working Papers in Economics 0542, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0542
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    Cited by:

    1. Hofmarcher, Paul & Crespo Cuaresma, Jesus & Grün, Bettina & Humer, Stefan & Moser, Mathias, 2018. "Bivariate jointness measures in Bayesian Model Averaging: Solving the conundrum," Journal of Macroeconomics, Elsevier, vol. 57(C), pages 150-165.
    2. Jesús Crespo Cuaresma & Gernot Doppelhofer & Martin Feldkircher, 2014. "The Determinants of Economic Growth in European Regions," Regional Studies, Taylor & Francis Journals, vol. 48(1), pages 44-67, January.
    3. Błażejowski, Marcin & Kwiatkowski, Jacek, 2015. "Bayesian Model Averaging and Jointness Measures for gretl," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 68(i05).
    4. Eduardo Ley & Mark F.J. Steel, 2009. "On the effect of prior assumptions in Bayesian model averaging with applications to growth regression This article was published online on 30 March 2009. An error was subsequently identified. This not," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(4), pages 651-674.
    5. Gernot Doppelhofer & Melvyn Weeks, 2011. "Robust Growth Determinants," CESifo Working Paper Series 3354, CESifo.
    6. Ley, Eduardo & Steel, Mark F.J., 2007. "Jointness in Bayesian variable selection with applications to growth regression," Journal of Macroeconomics, Elsevier, vol. 29(3), pages 476-493, September.
    7. Amegashie, J. Atsu & Ouattara, Bazoumanna & Strobl, Eric, 2007. "Moral Hazard and the Composition of Transfers: Theory with an Application to Foreign Aid," MPRA Paper 3158, University Library of Munich, Germany, revised 06 May 2007.
    8. Ley, Eduardo & Steel, Mark F. J., 2007. "On the effect of prior assumptions in Bayesian model averaging with applications to growth regression," Policy Research Working Paper Series 4238, The World Bank.
    9. Crespo Cuaresma, Jesus & Grün, Bettina & Hofmarcher, Paul & Humer, Stefan & Moser, Mathias, 2015. "A Comprehensive Approach to Posterior Jointness Analysis in Bayesian Model Averaging Applications," Department of Economics Working Paper Series 193, WU Vienna University of Economics and Business.
    10. Enrique Moral-Benito, 2010. "Model Averaging in Economics," Working Papers wp2010_1008, CEMFI.
    11. Vittorio Daniele, 2008. "Bureaucratic Delays and Constraints on Growth," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, July.
    12. León-González, Roberto & Montolio, Daniel, 2015. "Endogeneity and panel data in growth regressions: A Bayesian model averaging approach," Journal of Macroeconomics, Elsevier, vol. 46(C), pages 23-39.
    13. Doppelhofer, G. & Weeks, M., 2005. "Jointness of Growth Determinants," Cambridge Working Papers in Economics 0542, Faculty of Economics, University of Cambridge.
    14. Eicher, Theo S. & Papageorgiou, Chris & Roehn, Oliver, 2007. "Unraveling the fortunes of the fortunate: An Iterative Bayesian Model Averaging (IBMA) approach," Journal of Macroeconomics, Elsevier, vol. 29(3), pages 494-514, September.
    15. Crespo Cuaresma, Jesús & Slacik, Tomas, 2009. "On the determinants of currency crises: The role of model uncertainty," Journal of Macroeconomics, Elsevier, vol. 31(4), pages 621-632, December.
    16. Scharnagl, Michael & Schumacher, Christian, 2007. "Reconsidering the role of monetary indicators for euro area inflation from a Bayesian perspective using group inclusion probabilities," Discussion Paper Series 1: Economic Studies 2007,09, Deutsche Bundesbank.
    17. Shahram Amini & Christopher F. Parmeter, 2011. "Bayesian Model Averaging in R," Working Papers 2011-9, University of Miami, Department of Economics.
    18. Theo S. Eicher & Alex Lenkoski & Adrian Raftery, 2009. "Bayesian Model Averaging and Endogeneity Under Model Uncertainty: An Application to Development Determinants," Working Papers UWEC-2009-19-FC, University of Washington, Department of Economics.
    19. Ravazzolo, F. & van Dijk, D.J.C. & Paap, R. & Franses, Ph.H.B.F., 2006. "Bayesian Model Averaging in the Presence of Structural Breaks," Econometric Institute Research Papers EI 2006-33, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    20. Crespo Cuaresma, Jesus & Grün, Bettina & Hofmarcher, Paul & Humer, Stefan & Moser, Mathias, 2016. "Unveiling covariate inclusion structures in economic growth regressions using latent class analysis," European Economic Review, Elsevier, vol. 81(C), pages 189-202.
    21. Vanina Forget, 2012. "Doing well and doing good: a multi-dimensional puzzle," Working Papers hal-00672037, HAL.

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    More about this item

    Keywords

    Model Uncertainty; Dependencies among Regressors; Jointness; Determinants of Economic Growth;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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