ISSN:
1573-7020
Keywords:
convergence
;
growth
;
generalized method of moments
;
O41
;
O47
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract There are two sources of inconsistency in existing cross-country empirical work on growth: correlated individual effects and endogenous explanatory variables. We estimate a variety of cross-country growth regressions using a generalized method of moments estimator that eliminates both problems. In one application, we find that per capita incomes converge to their steady-state levels at a rate of approximately 10 percent per year. This result stands in sharp contrast to the current consensus, which places the convergence rate at 2 percent. We discuss the theoretical implications of this finding. In another application, we perform a test of the Solow model. Again, contrary to prior reults, we reject both the standard and the augmented version of the model.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF00141044
