Determinants of Economic Growth: A Bayesian Panel Data Approach

33 Pages Posted: 20 Apr 2016

See all articles by Enrique Moral-Benito

Enrique Moral-Benito

Banco de España; Universidad Carlos III de Madrid

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Date Written: February 1, 2009

Abstract

Model uncertainty hampers consensus on the key determinants of economic growth. Some recent cross-country, cross-sectional analyses have employed Bayesian Model Averaging to address the issue of model uncertainty. This paper extends that approach to panel data models with country-specific fixed effects. The empirical results show that the most robust growth determinants are the price of investment goods, distance to major world cities, and political rights. This suggests that growth-promoting policy strategies should aim to reduce taxes and distortions that raise the prices of investment goods; improve access to international markets; and promote democracy-enhancing institutional reforms. Moreover, the empirical results are robust to different prior assumptions on expected model size.

Keywords: Population Policies, Achieving Shared Growth, Inequality, Economic Theory & Research

Suggested Citation

Moral-Benito, Enrique, Determinants of Economic Growth: A Bayesian Panel Data Approach (February 1, 2009). World Bank Policy Research Working Paper Series, Vol. , pp. -, 2009. Available at SSRN: https://ssrn.com/abstract=1344715

Enrique Moral-Benito (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Universidad Carlos III de Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903
Spain

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