A Projection Pursuit Approach to Cross Country Growth Data
The empirical modeling of the cross-country differences in growth behavior is undoubtedly one of the most predominant research topics in applied macro-econometrics. However, despite the vast research effort it seems that there are only a few firm conclusions on the sources of cross-country differences. Unlike the bulk of the literature which focuses on linear parametric models this paper studies a semi-parametric way of modelling. In particular, it employs projection pursuit regression (PPR) to model the mean regression function of the growth process by a sum of unknown ridge functions (functions of linear combinations of covariates). PPR model was proposed by Friedman and Stuetzle (1981) to approximate high dimensional functions by simpler functions that operate in low dimensional spaces-typically one-dimensional. My findings identify non-linear relationships among the basic Solow-type variables. In particular, initial income and human capital affect growth in a very nonlinear way. Furthermore, there is evidence of interaction effects between human capital and initial income as well as between initial income and population growth rates. The findings suggest the presence of two steady-state equilibria that classify countries into two groups with different convergence characteristics.
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.:
- Durlauf,S.N. & Quah,D.T., 1998.
"The new empirics of economic growth,"
3, Wisconsin Madison - Social Systems.
- Steven N. Durlauf & Danny T. Quah, 1998. "The New Empirics of Economic Growth," Working Papers 98-01-012, Santa Fe Institute.
- Steven N. Durlauf & Danny T. Quah, 1998. "The New Empirics of Economic Growth," NBER Working Papers 6422, National Bureau of Economic Research, Inc.
- S Durlauf & Danny Quah, 1998. "The New Empirics of Economic Growth," CEP Discussion Papers dp0384, Centre for Economic Performance, LSE.
- Bruce E. Hansen, 2000.
"Sample Splitting and Threshold Estimation,"
Econometric Society, vol. 68(3), pages 575-604, May.
- Bernard, Andrew B. & Durlauf, Steven N., 1996.
"Interpreting tests of the convergence hypothesis,"
Journal of Econometrics,
Elsevier, vol. 71(1-2), pages 161-173.
- Andrew B. Bernard & Steven N. Durlauf, 1994. "Interpreting Tests of the Convergence Hypothesis," NBER Technical Working Papers 0159, National Bureau of Economic Research, Inc.
- Bernard, A.B. & Durlauf, S.N., 1994. "Interpreting Tests of the Convergence Hypothesis," Working papers 9401r, Wisconsin Madison - Social Systems.
- Barro, R.J., 1989.
"Economic Growth In A Cross Section Of Countries,"
RCER Working Papers
201, University of Rochester - Center for Economic Research (RCER).
- William A. Brock & Steven N.Durlauf, 2000.
"Growth Economics and Reality,"
NBER Working Papers
8041, National Bureau of Economic Research, Inc.
- Durlauf, S.N. & Johnson, P.A., 1994.
"Multiple Regimes and Cross-Country Growth Behavior,"
9419, Wisconsin Madison - Social Systems.
- Durlauf, Steven N & Johnson, Paul A, 1995. "Multiple Regimes and Cross-Country Growth Behaviour," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(4), pages 365-384, Oct.-Dec..
- Durlauf, S.M. & Johnson, P.A., 1995. "Multiple Regimes and Cross-Country Growth Behavior," Working papers 9419r, Wisconsin Madison - Social Systems.
When requesting a correction, please mention this item's handle: RePEc:ucy:cypeua:0213. 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: ()
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.