IDEAS home Printed from https://ideas.repec.org/p/ecm/nasm04/262.html

Endogenous Policy and Cross-Country Growth Empirics

Author

Listed:
  • G? Rehme

Abstract

This paper presents an accumulation-driven growth model where investment depends on public policy which in turn depends on economically important fundamentals. It is argued that conditioning on factor accumulation in growth regressions that also include policy variables may be problematic. When policy is endogenous the measured effects of policy on growth will generally be biased. Based on the model and OECD data, the signs of the biases are derived. It is shown that the measured effects on growth of tax variables related to the tax base are biased upwards and redistribution variables are generally biased downwards. Based on these signed biases the paper discusses some empirical results that seem puzzling from a theoretical viewpoint.

Suggested Citation

  • G? Rehme, 2004. "Endogenous Policy and Cross-Country Growth Empirics," Econometric Society 2004 North American Summer Meetings 262, Econometric Society.
    • Handle: RePEc:ecm:nasm04:262
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aboal, Diego & Noya, Nelson & Rius, Andrés, 2014. "Contract Enforcement and Investment: A Systematic Review of the Evidence," World Development, Elsevier, vol. 64(C), pages 322-338.
    2. Rehme, Günther, 2014. "Endogenous (re-)distributive policies and economic growth: A comparative static analysis," Economic Modelling, Elsevier, vol. 40(C), pages 355-366.
    3. Günther Rehme, 2011. "Endogenous Policy And Cross‐Country Growth Empirics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 58(2), pages 262-296, May.
    4. Toshiki Tamai, 2015. "Redistributive taxation, wealth distribution, and economic growth," Journal of Economics, Springer, vol. 115(2), pages 133-152, June.
    5. Sebastián Fleitas & Andrés Rius & Carolina Román & Henry Willebald, 2013. "Contract enforcement, investment and growth in Uruguay since 1870," Documentos de Trabajo (working papers) 13-01, Instituto de Economía - IECON.
    6. Cavusoglu, Nevin, 2012. "LISREL growth model on direct and indirect effects using cross-country data," Economic Modelling, Elsevier, vol. 29(6), pages 2362-2370.
    7. Kerim Peren Arin & Emin Gahramanov & Tolga Omay & Xueli Tang & Mehmet A. Ulubasoglu, 2024. "A tale of two taxes: State‐dependency of tax policy," Scottish Journal of Political Economy, Scottish Economic Society, vol. 71(1), pages 1-27, February.
    8. Si, Shuyang & Lyu, Mingjie & Lin Lawell, C.-Y. Cynthia & Chen, Song, 2021. "The effects of environmental policies in China on GDP, output, and profits," Energy Economics, Elsevier, vol. 94(C).
    9. Si, Shuyang & Lyu, Mingjie & Lin Lawell, C.-Y. Cynthia & Chen, Song, 2018. "The effects of energy-related policies on energy consumption in China," Energy Economics, Elsevier, vol. 76(C), pages 202-227.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecm:nasm04:262. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/essssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.