Convergence and Growth: Revisited
The present paper builds on the work of Caselli, Esquivel and Lefort (1996) where growth equations are estimated using the Generalized Moment Method. It is shown here that the results of those authors are biased due to a methodological problem. The convergence rate of around 12% that they report is overestimated and the real rate is in fact around 3 or 4 %; in line with earlier studies. The results found are robust to various new dynamic panel estimation techniques, although the significant differences are indicated when making inferences if variance corrections are not considered for estimators that use the Generalized Moment Method.
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- Stephen Bond & Anke Hoeffler & Jonathan Temple, 2001.
"GMM Estimation of Empirical Growth Models,"
2001-W21, Economics Group, Nuffield College, University of Oxford.
- Bond, Stephen Roy & Hoeffler, Anke & Temple, Jonathan, 2001. "GMM Estimation of Empirical Growth Models," CEPR Discussion Papers 3048, C.E.P.R. Discussion Papers.
- Richard Blundell & Stephen Bond, 2000. "GMM Estimation with persistent panel data: an application to production functions," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 321-340.
- Richard Blundell & Stephen Bond, 1999. "GMM estimation with persistent panel data: an application to production functions," IFS Working Papers W99/04, Institute for Fiscal Studies.
- Kiviet, Jan F., 1995. "On bias, inconsistency, and efficiency of various estimators in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 68(1), pages 53-78, July.
- Tom Doan, "undated". "LSDVC: RATS procedure to estimate a dynamic FE model with correction for bias," Statistical Software Components RTS00111, Boston College Department of Economics.
- Frank Windmeijer, 2000. "A finite sample correction for the variance of linear two-step GMM estimators," IFS Working Papers W00/19, Institute for Fiscal Studies. Full references (including those not matched with items on IDEAS)
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