Are Any Growth Theories Robust?
Steven N. Durlauf
University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER)
University of Cyprus - Department of Economics; University of Bologna - Rimini Center for Economic Analysis (RCEA)
Chih Ming Tan
University of North Dakota; Clark University - Department of Economics
The Economic Journal, Vol. 118, Issue 527, pp. 329-346, March 2008
This article investigates the strength of empirical evidence for various growth theories when there is model uncertainty with respect to the correct growth model. Using model averaging methods, we find little evidence that so-called fundamental growth theories play an important role in explaining aggregate growth. In contrast, we find strong evidence for macroeconomic policy effects and a role for unexplained regional heterogeneity, as well as some evidence of parameter heterogeneity in the aggregate production function. We conclude that the ability of cross-country growth regressions to adjudicate the relative importance of alternative growth theories is limited.
Number of Pages in PDF File: 18Accepted Paper Series
Date posted: February 26, 2008
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