Determinants of Human Development: Insights from State-Dependent Panel Models
In this paper, we study economic development in a panel of 84 countries from 1970 to 2005. We focus on characterizing heterogeneities in the development effects of macroeconomic policies and on comparing the development process as measured by GDP to that measured by the Human Development Index (HDI). We do so within a novel dynamic panel modelling framework that can account for crucial aspects of both the cross-sectional and intertemporal features of the observed process of economic development, and that can capture the dependence of the development effects of macroeconomic policies on differences in countries' persistent characteristics, such as their social norms and institutions. Among our findings are that macroeconomic policies affect economic development with less delay than suggested by conventional econometric frameworks, yet impact HDI with longer delay and overall less strongly than GDP. Differences in countries' persistent characteristics may even affect the sign of the long-run development effects of a given macroeconomic policy: Fiscal stimuli in the form of government consumption positively affect GDP in countries with low institutional quality, but negatively affect long-run GDP in countries with high institutional quality.
|Date of creation:||Sep 2010|
|Date of revision:|
|Publication status:||Published as background research for the 2010 Human Development Report.|
|Contact details of provider:|| Postal: 304 E 45th Street, FF-12th Floor, New York, NY, 10017|
Web page: http://hdr.undp.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004.
"Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development,"
Journal of Economic Growth,
Springer, vol. 9(2), pages 131-165, 06.
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2002. "Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development," NBER Working Papers 9305, National Bureau of Economic Research, Inc.
- Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers.
- Andrea Brandolini, 2008. "On applying synthetic indices of multidimensional well-being: health and income inequalities in selected EU countries," Temi di discussione (Economic working papers) 668, Bank of Italy, Economic Research and International Relations Area.
- Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 1127-1170.
- Francisco Rodríguez, 2006. "Cleaning Up the Kitchen Sink: Growth Empirics When the World Is Not Simple," Wesleyan Economics Working Papers 2006-004, Wesleyan University, Department of Economics, revised 17 May 2007.
- Koen DECANCQ & María Ana LUGO, 2010.
"Weights in multidimensional indices of well-being: an overview,"
Working Papers Department of Economics
ces10.06, KU Leuven, Faculty of Economics and Business, Department of Economics.
- Koen Decancq & María Ana Lugo, 2013. "Weights in Multidimensional Indices of Wellbeing: An Overview," Econometric Reviews, Taylor & Francis Journals, vol. 32(1), pages 7-34, January.
- DECANCQ, Koen & LUGO, Maria Ana, . "Weights in multidimensional indices of wellbeing: an overview," CORE Discussion Papers RP 2493, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- David Mayer-Foulkes, 2010.
"Divergences and Convergences in Human Development,"
Human Development Research Papers (2009 to present)
HDRP-2010-20, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
- Koop, Gary & Pesaran, M. Hashem & Potter, Simon M., 1996. "Impulse response analysis in nonlinear multivariate models," Journal of Econometrics, Elsevier, vol. 74(1), pages 119-147, September.
- William Hauk & Romain Wacziarg, 2009.
"A Monte Carlo study of growth regressions,"
Journal of Economic Growth,
Springer, vol. 14(2), pages 103-147, June.
- Binder, M. & Pesaran, M.H., 1996. "Stochastic Growth," Cambridge Working Papers in Economics 9615, Faculty of Economics, University of Cambridge.
- Gernot Doppelhofer & Ronald I. Miller & Xavier Sala-i-Martin, 2000.
"Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (Bace) Approach,"
OECD Economics Department Working Papers
266, OECD Publishing.
- Xavier Sala-I-Martin & Gernot Doppelhofer & Ronald I. Miller, 2004. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," American Economic Review, American Economic Association, vol. 94(4), pages 813-835, September.
- Gernot Doppelhofer & Ronald I. Miller & Xavier Sala-i-Martin, 2000. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," NBER Working Papers 7750, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:hdr:papers:hdrp-2010-24. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (HDRO/UNDP)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.