What Do We Know About Economic Growth? Or, Why Don't We Know Very Much?
Posted: 11 Jun 2001
The last 10 years has seen an explosion in cross country econometric studies of growth, driven by two factors---new mathematical models of the growth process that lend themselves to econometric testing, and new data sets that make such testing possible. This paper looks at a selective review of these studies. It concludes that the results are disappointing in that no model has proven robust to trial by repeated regression. The paper suggests some reasons for this---including that the tested models tend to be ahistorical and over-simple in terms of their causal accounts. It concludes with possible lessons for econometric work in this area.
Keyword(s): economic growth, theory, cross country regressions
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