Growth Empirics Under Model Uncertainty: Is Africa Different?

34 Pages Posted: 9 Jan 2006

Date Written: January 2005

Abstract

This paper attempts to identify robust patterns of cross-country growth behavior in the world as a whole and Africa. It employs a novel methodology that incorporates a dynamic panel estimator, and Bayesian Model Averaging to explicitly account for model uncertainty. The findings indicate that: (i) in addition to initial conditions, various economic factors such as higher investment, lower inflation, lower government consumption, better fiscal stance, improved political environment, exogenous terms-of-trade shocks, and fixed geographical factors are robustly correlated with growth; (ii) what is good for growth around the world is, in principle, also good for growth in Africa; and (iii) political and institutional variables are particularly important in explaining African growth.

Keywords: Economic growth, growth regressions, Bayesian model averaging, dynamic panel estimation

JEL Classification: O4, C11, C33

Suggested Citation

Tsangarides, Charalambos G., Growth Empirics Under Model Uncertainty: Is Africa Different? (January 2005). International Monetary Fund Working Paper No. 05/18, Available at SSRN: https://ssrn.com/abstract=874239

Charalambos G. Tsangarides (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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