Jointness of Growth Determinants

51 Pages Posted: 15 May 2007

See all articles by Gernot Doppelhofer

Gernot Doppelhofer

University of Cambridge - Faculty of Economics and Politics; CESifo (Center for Economic Studies and Ifo Institute)

Melvyn Weeks

University of Cambridge - Faculty of Economics and Politics

Date Written: April 2007

Abstract

This paper introduces a new measure of dependence or jointness among explanatory variables. Jointness is based on the joint posterior distribution of variables over the model space, thereby taking model uncertainty into account. By looking beyond marginal measures of variable importance, jointness reveals generally unknown forms of dependence. Positive jointness implies that regressors are complements, representing distinct, but mutually reinforcing effects. Negative jointness implies that explanatory variables are substitutes and capture similar underlying effects. In a cross-country dataset we show that jointness among 67 determinants of growth is important, affecting inference and informing economic policy.

Keywords: model uncertainty, dependence among regressors, jointness, determinants of economic growth

JEL Classification: C11, C52, O20, O50

Suggested Citation

Doppelhofer, Gernot and Weeks, Melvyn, Jointness of Growth Determinants (April 2007). CESifo Working Paper Series No. 1978, Available at SSRN: https://ssrn.com/abstract=986545

Gernot Doppelhofer (Contact Author)

University of Cambridge - Faculty of Economics and Politics ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Melvyn Weeks

University of Cambridge - Faculty of Economics and Politics ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom

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