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Government Partisanship, Labor Organization and Macroeconomic Performance: A Corrigendum

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  • Beck, Nathaniel
  • Katz, Jonathan N.
  • Alvarez, Michael R.
  • Garrett, Geoffrey
  • Lange, Peter

Abstract

Alvarez, Garrett and Lange (1991) used cross-national panel data on the Organization for Economic Coordination and Development nations to show that countries with left governments and encompassing labor movements enjoyed superior economic performance. Here we show that the standard errors reported in that article are incorrect. Reestimation of the model using ordinary least squares and robust standard errors upholds the major finding of Alvarez, Garrett and Lange, regarding the political and institutional causes of economic growth but leaves the findings for unemployment and inflation open to question. We show that the model used by Alvarez, Garrett and Lange, feasible generalized least squares, cannot produce standard errors when the number of countries analyzed exceeds the length of the time period under analysis. Also, we argue that ordinary least squares with robust standard errors is superior to feasible generalized least squares for typical cross-national panel studies.
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Suggested Citation

  • Beck, Nathaniel & Katz, Jonathan N. & Alvarez, Michael R. & Garrett, Geoffrey & Lange, Peter, 1993. "Government Partisanship, Labor Organization and Macroeconomic Performance: A Corrigendum," Working Papers 848, California Institute of Technology, Division of the Humanities and Social Sciences.
  • Handle: RePEc:clt:sswopa:848
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    Cited by:

    1. Mohammad Abdul Munim Joarder & A. K. M. Nurul Hossain & Monir Uddin Ahmed, 2016. "Does the central bank contribute to the political monetary cycles in Bangladesh?," Economic Change and Restructuring, Springer, vol. 49(4), pages 365-394, November.
    2. Georges Tanguay & Gary Hunt & Nicolas Marceau, 2005. "Food Prices and the Timing of Welfare Payments: A Canadian Study," Canadian Public Policy, University of Toronto Press, vol. 31(2), pages 145-160, June.
    3. Kåre Johansen & Ørjan Mydland & Bjarne Strøm, 2007. "Politics in wage setting: does government colour matter?," Economics of Governance, Springer, vol. 8(2), pages 95-109, February.
    4. Kenworthy, Lane, 2000. "Quantitative indicators of corporatism: A survey and assessment," MPIfG Discussion Paper 00/4, Max Planck Institute for the Study of Societies.
    5. Santiago Lago-Peñas & Bruno Ventelou, 2006. "The Effects of Regional Sizing on Growth," Public Choice, Springer, vol. 127(3), pages 407-427, June.
    6. Khaled Elmawazini & Gamal Atallah & Sonny Nwankwo & Yazid Dissou, 2013. "US Foreign Affiliates, Technology Diffusion and Host Country Human Development: Human Development Index versus Human Capital," Industry and Innovation, Taylor & Francis Journals, vol. 20(1), pages 69-91, January.
    7. Hong, KiHoon & Wu, Eliza, 2016. "The roles of past returns and firm fundamentals in driving US stock price movements," International Review of Financial Analysis, Elsevier, vol. 43(C), pages 62-75.
    8. Hall, Peter A. & Franzese, Robert J., 1997. "Mixed signals: central bank independence, coordinated wage bargaining, and European Monetary Union," Discussion Papers, Research Unit: Economic Change and Employment FS I 97-307, Social Science Research Center Berlin (WZB).
    9. Millo, Giovanni, 2014. "Robust standard error estimators for panel models: a unifying approach," MPRA Paper 54954, University Library of Munich, Germany.
    10. Niklas Potrafke, 2006. "Parties Matter in Allocating Expenditures: Evidence from Germany," Discussion Papers of DIW Berlin 652, DIW Berlin, German Institute for Economic Research.

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