Growth Empirics in Panel Data Under Model Uncertainty and Weak Exogeneity
29 Pages Posted: 2 Jan 2013
Date Written: January 2, 2013
This paper considers panel growth regressions in the presence of model uncertainty and reverse causality concerns. For this purpose, my econometric framework combines Bayesian Model Averaging with a suitable likelihood function for dynamic panel models with weakly exogenous regressors and fixed effects. An application of this econometric methodology to a panel of countries over the 1960-2000 period indicates that there is no robust determinant of economic growth and that the rate of conditional convergence is indistinguishable from zero.
Keywords: growth regressions, panel data, model uncertainty, bayesian model averaging
JEL Classification: O40, C23, C11
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