Time Varying Determinants of Cross-Country Growth
In this paper we investigate the time variation in the short term growth determinants through five subperiod cross sectional growth regressions. We also use a panel regression to analyze the long term pervasive drivers of cross-country growth. A fully Bayesian approach in the spirit of Fernandez, Ley and Steel (2001) is used to determine the likely candidates for the best approximating growth model. Although the findings support the optimistic view that growth regression has empirical merit, there is evidence of time variation of the growth determinants. Some of the variables like, Ratio of Real Domestic Investment to GDP, Real GDP per capita, and Sub-Saharian African Dummy emerge as long term growth indicators, while Fertility Rate loses its historical status as ”core growth” factor. The findings also show that the convergence effect of Real GDP per Capita happens during the middle subperiods. Short run analysis shows evidence of a delay in the growth rate response to the initial conditions followed by an acceleration effect before hitting a plateau.
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| Length: | 26 pages |
| Date of creation: | Feb 2008 |
| Handle: | RePEc:swe:wpaper:2008-03 |
| Contact details of provider: | Postal: Australian School of Business Building, Sydney 2052 Phone: (+61)-2-9385-3380 Fax: +61)-2- 9313- 6337 Web page: http://www.economics.unsw.edu.au/ Email: More information through EDIRC
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References listed on IDEAS
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- Carmen Fernandez & Eduardo Ley & Mark F. J. Steel, 2001.
"Model uncertainty in cross-country growth regressions,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 16(5), pages 563-576.
- Carmen Fernandez & Eduardo Ley & Mark Steel, 1999. "Model uncertainty in cross-country growth regressions," Econometrics 9903003, EconWPA, revised 06 Oct 2001.
- Carmen Fernandez & Eduardo Ley & Mark Steel, 2001. "Model uncertainty in cross-country growth regressions," Econometrics 0110002, EconWPA.
- Fernandez, Carmen & Ley, Eduardo & Steel, Mark F. J., 2001. "Benchmark priors for Bayesian model averaging," Journal of Econometrics, Elsevier, vol. 100(2), pages 381-427, February.
- Carmen Fernández & Eduardo Ley & Mark F. J. Steel, "undated". "Benchmark priors for Bayesian Model averaging," Working Papers 98-06, FEDEA.
- Carmen Fernandez & Eduardo Ley & Mark F.J. Steel, 1998. "Benchmark Priors for Bayesian Model Averaging," Econometrics 9804001, EconWPA, revised 31 Jul 1999.
- Carmen Fernandez & Eduardo Ley & Mark F J Steel, 1998. "Benchmark priors for Bayesian model averaging," ESE Discussion Papers 26, Edinburgh School of Economics, University of Edinburgh.
- Carmen Fernandez & Eduardo Ley & Mark F J Steel, 1998. "Benchmark priors for Bayesian model averaging," ESE Discussion Papers 66, Edinburgh School of Economics, University of Edinburgh.
- Robert Kohn & Rachida Ouysse, 2007. "Bayesian Variable Selection of Risk Factors in the APT Model," Discussion Papers 2007-32, School of Economics, The University of New South Wales.
- 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," OECD Economics Department Working Papers 266, OECD Publishing.
- 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.
- Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 1127-1170. Full references (including those not matched with items on IDEAS)
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