Determinants of Economic Growth : A Bayesian Panel Data Approach

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 t...

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Bibliographic Details
Main Author:	Moral-Benito, Enrique
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ACCOUNTING AVERAGE GROWTH AVERAGE GROWTH RATE BENCHMARK CALCULATIONS CAPITAL ACCUMULATION CIVIL LIBERTIES CONDITIONAL CONVERGENCE CONTRIBUTION CONVERGENCE PARAMETER COUNTRY REGRESSIONS COVARIANCE MATRIX CROSS COUNTRY CROSS COUNTRY EVIDENCE CROSS-COUNTRY REGRESSION DATA AVAILABILITY DATA SET DEMOCRACY DEMOGRAPHIC FACTORS DEPENDENT VARIABLE DETERMINANTS OF GROWTH DEVELOPMENT INDICATORS DEVELOPMENT RESEARCH DYNAMIC PANEL DYNAMIC STRUCTURE ECONOMETRIC MODEL ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMIC INTEGRATION ECONOMIC REFORM ECONOMIC REVIEW ECONOMICS EMPIRICAL APPROACHES EMPIRICAL ESTIMATES EMPIRICAL GROWTH MODEL EMPIRICAL GROWTH REGRESSIONS EMPIRICAL MODEL EMPIRICAL RESEARCH EMPIRICAL RESULTS EMPIRICAL STUDIES ENDOGENOUS VARIABLES EQUILIBRIUM LEVEL ERROR TERM ESTIMATED MODELS EXPLANATORY VARIABLES EXPORTS FIXED EFFECTS FUTURE RESEARCH GDP GDP PER CAPITA GROWTH CONTEXT GROWTH DATA GROWTH DETERMINANTS GROWTH EMPIRICS GROWTH LITERATURE GROWTH MODEL GROWTH MODELS GROWTH RATE GROWTH RATE OF POPULATION GROWTH RATES GROWTH REGRESSION GROWTH REGRESSIONS GROWTH THEORIES GROWTH-PROMOTING POLICY INCOME INCOME DATA INCOME DIFFERENCES INCREASING RETURNS INDEPENDENT VARIABLES INVESTMENT RATE LABOR FORCE LAGGED DEPENDENT LANDLOCKED COUNTRIES LIFE EXPECTANCY LINEAR REGRESSION LOGARITHMIC SCALE LONG-TERM GROWTH MACROECONOMIC ENVIRONMENT MACROECONOMIC STABILITY MACROECONOMICS MALARIA MONETARY ECONOMICS NATURAL ENDOWMENTS NATURAL RESOURCE NATURAL RESOURCE ABUNDANCE NORMAL DISTRIBUTION OPPORTUNITY SET POINT ESTIMATES POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLICY STRATEGIES POLITICAL ECONOMY POLITICAL POWER POLITICAL RIGHTS POPULATION DENSITY POPULATION GROWTH PRIMARY EDUCATION PRIVATE SECTOR PROBABILITIES PROBABILITY PRODUCTIVITY PROGRESS PROSPERITY PUBLIC INVESTMENT PUBLIC POLICY REAL EXCHANGE RATE REAL GDP RESPECT SECONDARY EDUCATION SERIAL CORRELATION SOCIAL RESEARCH SOURCES OF INCOME TAXATION TRADE OPENNESS TRADE POLICIES URBAN AREAS URBAN POPULATION WAR WORTH
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090202131616 http://hdl.handle.net/10986/4027

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Summary:	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.

Determinants of Economic Growth : A Bayesian Panel Data Approach

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