Determinants of Economic Growth : A Bayesian Panel Data Approach

Moral-Benito, Enrique

Determinants of Economic Growth : A Bayesian Panel Data Approach

2009

Moral-Benito, Enrique

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.

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AGROVOC Keywords

accounting democracy development indicators development research econometrics economic geography economic growth economic integration economics exports growth models growth rate income landlocked countries macroeconomics malaria population density population growth primary education private sector productivity prosperity public investment secondary education taxation trade policies urban areas urban population war

Bibliographic information

Other Subjects

Long-term growth; Income data; Empirical growth model; Gdp; Growth regression; Growth literature; Convergence parameter; Point estimates; Progress; Growth rate of population; Data set; Growth-promoting policy; Dynamic structure; Labor force; Policy research; Linear regression; Social research; Political power; Dynamic panel; Calculations; Independent variables; Economic review; Natural endowments; Sources of income; Life expectancy; Estimated models; Political rights; Probabilities; Cross country evidence; Income differences; Opportunity set; Fixed effects; Empirical growth regressions; Cross-country regression; Political economy; Demographic factors; Data availability; Empirical research; Dependent variable; Real exchange rate; Conditional convergence; Macroeconomic environment; Explanatory variables; Real gdp; Econometric model; Policy research working paper; Lagged dependent; Serial correlation; Benchmark; Average growth; Capital accumulation; Public policy; Growth determinants; Empirical estimates; Increasing returns; Empirical approaches; Empirical studies; Worth; Natural resource abundance; Future research; Economic activity; Civil liberties; Growth rates; Equilibrium level; Monetary economics; Normal distribution; Growth regressions; Economic reform; Growth empirics; Logarithmic scale; Growth context; Trade openness; Empirical model; Country regressions; Policy strategies; Endogenous variables; Determinants of growth; Respect; Investment rate; Contribution; Growth model; Growth theories; Probability; Macroeconomic stability; Cross country; Empirical results; Gdp per capita; Natural resource; Growth data; Error term; Average growth rate; Covariance matrix

License

Policy Research working paper ; no. WPS 4830http://creativecommons.org/licenses/by/3.0/us/World BankCreative Commons Attribution CC BY 3.0

Source

Policy Research working paper ; no. WPS 4830

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http://hdl.handle.net/10986/4027

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