Determinants of Long-Term Economic Growth Redux: A Measurement Error Model Averaging (MEMA) Approach

This paper estimates determinants of long-run growth rates of GDP per capita in a cross section of countries. We propose a novel Measurement Error Model Averaging (MEMA) approach that accounts for measurement error in international income data as well as model uncertainty. Estimating the model using eight vintages of the Penn World Tables (PWT) together with other proposed growth determinants, we identify 18 variables related to economic growth. The results are robust to allowing for outliers in the form of heteroscedastic model errors.

[1]  B. Basberg.  Commercial and Economic Aspects of Antarctic Exploration -- From the Earliest Discoveries into the 19th Century. , 2015 .

[2]  Stefanie A. Haller,et al.  Ownership Change and its Implications for the Match between the Plant and its Workers. , 2015 .

[3]  J. Geweke,et al.  Bayesian Treatment of the Independent Student- t Linear Model , 1993 .

[4]  S. Legge,et al.  Trading Off Welfare and Immigration in Europe. , 2015 .

[5]  Marek Jarocinski,et al.  Determinants of Economic Growth : Will Data Tell ? † , 2008 .

[6]  Andrew Gelman,et al.  Inference from Simulations and Monitoring Convergence , 2011 .

[7]  A. Melé,et al.  On the Perils of Stabilizing Prices when Agents are Learning , 2014, Journal of Monetary Economics.

[8]  Martin Wittenberg,et al.  Interpretation of Regressions with Multiple Proxies , 2001, The Review of Economics and Statistics.

[9]  X. Sala-i-Martin,et al.  Lights, Camera … Income! Illuminating the National Accounts-Household Surveys Debate , 2016 .

[10]  H. Aiura.  The Effect of Cross-Border Healthcare on Quality, Public Health Insurance, and Income Redistribution , 2016 .

[11]  Does Reference Pricing Drive Out Generic Competition in Pharmaceutical Markets? Evidence from a Policy Reform. , 2015 .

[12]  Roger Bivand,et al.  Revisiting the Boston Data Set (Harrison and Rubinfeld, 1978): A Case Study in the Challenges of System Articulation , 2015 .

[13]  Linda Nøstbakken,et al.  Quota Enforcement and Capital Investment in Natural Resource Industries , 2015, Marine Resource Economics.

[14]  Roger C. Kormendi,et al.  Macroeconomic determinants of growth: Cross-country evidence , 1985 .

[15]  M. Steel,et al.  Model uncertainty in cross-country growth regressions , 2001 .

[16]  F. Carmignani,et al.  Introduction to Modern Economic Growth. , 2012 .

[17]  Marek Jarociński.  Imposing Parsimony in Cross-Country Growth Regressions , 2010, SSRN Electronic Journal.

[18]  B. Basberg.  Keynes, Trouton and the Hector Whaling Company. A personal and professional relationship , 2015 .

[19]  K. Salvanes,et al.  Childhood Nutrition and Labor Market Outcomes: Evidence from a School Breakfast Program , 2016, Journal of Public Economics.

[20]  S Richardson,et al.  A Bayesian approach to measurement error problems in epidemiology using conditional independence models. , 1993, American journal of epidemiology.

[21]  X. Sala-i-Martin,et al.  Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (Bace) Approach , 2000 .

[22]  R. Gilbert,et al.  Licensing and Innovation with Imperfect Contract Enforcement , 2015 .

[23]  James J. Heckman,et al.  Handbook of Econometrics , 1985 .

[24]  T. J. Mitchell,et al.  Bayesian Variable Selection in Linear Regression , 1988 .

[25]  D. Rao,et al.  A Method to Construct World Tables of Purchasing Power Parities and Real Incomes Based on Multiple Benchmarks and Auxiliary Information: Analytical and Empirical Results , 2008 .

[26]  J. Temple.  Growth Regressions and What the Textbooks Don't Tell You , 1999 .

[27]  Eduardo Ley,et al.  On the Effect of Prior Assumptions in Bayesian Model Averaging With Applications to Growth Regression , 2007 .

[28]  Linda Nøstbakken,et al.  From Fossil Fuels to Renewables: The Role of Electricity Storage , 2015, SSRN Electronic Journal.

[29]  R. O’Hara,et al.  A review of Bayesian variable selection methods: what, how and which , 2009 .

[30]  Kurt R. Brekke,et al.  Reference pricing with endogenous generic entry. , 2016, Journal of health economics.

[31]  K. Salvanes,et al.  Disease Control and Inequality Reduction: Evidence from a Tuberculosis Testing and Vaccination Campaign , 2015, The Review of Economic Studies.

[32]  T. Shiba,et al.  Dirichlet Prior for Estimating Unknown Regression Error Heteroskedasticity , 2015 .

[33]  N. May,et al.  The Local Economic Impact of Wind Power Deployment , 2015, SSRN Electronic Journal.

[34]  P. Aghion,et al.  Handbook of Economic Growth , 2005 .

[35]  A. Sandmo.  The Public Economics of Climate Change , 2015 .

[36]  R. Feenstra,et al.  Estimating Real Production and Expenditures across Nations: A Proposal for Improving the Penn World Tables , 2004, The Review of Economics and Statistics.

[37]  Simon Johnson,et al.  provided that full credit, including © notice, is given to the source. Is Newer Better? Penn World Table Revisions and Their Impact on Growth Estimates , 2009 .

[38]  T. C. Edens.  Economic growth. , 1975, Science.

[39]  Raymond J. Carroll,et al.  Measurement error in nonlinear models: a modern perspective , 2006 .

[40]  E. Cannon,et al.  Variations in the price and quality of English grain, 1750-1914: Quantitative evidence and empirical implications , 2015 .

[41]  D. Madigan,et al.  A method for simultaneous variable selection and outlier identification in linear regression , 1996 .

[42]  Gordon Tullock,et al.  An empirical analysis of cross-national economic growth, 1951-1980 , 1989 .

[43]  Ingvild Almås,et al.  Pro-poor Price Trends and Inequality - The Case of India , 2016 .

[44]  Ingvild Almås,et al.  Fairness and the Development of Inequality Acceptance , 2010, Science.

[45]  M. Clyde,et al.  Mixtures of g Priors for Bayesian Variable Selection , 2008 .

[46]  A. Goldberger.  STRUCTURAL EQUATION METHODS IN THE SOCIAL SCIENCES , 1972 .

[47]  UNDERSTANDING NON-BAYESIANS , 2010 .

[48]  L. Brunt.  Weather Shocks and English Wheat Yields, 1690-1871 , 2015 .

[49]  G. Imbens,et al.  Bias From Classical and Other Forms of Measurement Error , 2000 .

[50]  E. George,et al.  Journal of the American Statistical Association is currently published by American Statistical Association. , 2007 .

[51]  J. Hausman.  Mismeasured Variables in Econometric Analysis: Problems from the Right and Problems from the Left , 2001 .

[52]  A. Zellner.  Bayesian Estimation and Prediction Using Asymmetric Loss Functions , 1986 .

[53]  M. Steel,et al.  Benchmark Priors for Bayesian Model Averaging , 2001 .

[54]  Robert Summers,et al.  Real GDP per Capita for More Than One Hundred Countries , 1978 .

[55]  Dan A. Black,et al.  Estimating the Returns to College Quality with Multiple Proxies for Quality , 2006, Journal of Labor Economics.

[56]  K. Salvanes,et al.  Long-Term Consequences of Access to Well-Child Visits , 2015, SSRN Electronic Journal.

[57]  J. T. Klovland.  Shipping in Dire Straits: New Evidence on Trends and Cycles in Coal Freights from Britain, 1919-1939 , 2016 .

[58]  Linda Nøstbakken,et al.  How Do Land Markets Anticipate Regulatory Change? Evidence from Canadian Conservation Policy , 2016 .

[59]  Alexander W. Cappelen,et al.  Cutthroat Capitalism versus Cuddly Socialism: Are Americans More Meritocratic and Efficiency-Seeking than Scandinavians? , 2016, Journal of Political Economy.

[60]  Linda Nøstbakken,et al.  The Cost of Endangered Species Protection: Evidence from Auctions for Natural Resources , 2016, SSRN Electronic Journal.

[61]  Sandra E. Black,et al.  Healthy(?), Wealthy and Wise: Birth Order and Adult Health , 2015, Economics and human biology.

[62]  Linh Pham,et al.  Do Fossil-Fuel Taxes Promote Innovation in Renewable Electricity Generation? , 2016 .

[63]  K. Salvanes,et al.  The Evolution of Social Mobility: Norway Over the 20th Century , 2016, SSRN Electronic Journal.

[64]  Lars Ivar Oppedal Berge,et al.  How Strong are Ethnic Preferences? , 2015 .

[66]  Stefan Zeugner,et al.  Benchmark Priors Revisited: On Adaptive Shrinkage and the Supermodel Effect in Bayesian Model Averaging , 2009, SSRN Electronic Journal.

[67]  Martin Browning,et al.  Are Two Cheap, Noisy Measures Better Than One Expensive, Accurate One? , 2009 .

[68]  T. Fearn,et al.  Multivariate Bayesian variable selection and prediction , 1998 .

[69]  Kurt R. Brekke,et al.  Do Treatment Decisions Depend on Physicians' Financial Incentives? , 2015 .

[70]  A. Gelman.  Prior distributions for variance parameters in hierarchical models (comment on article by Browne and Draper) , 2004 .

[71]  Amalia R. Miller,et al.  Women Helping Women? Evidence from Private Sector Data on Workplace Hierarchies , 2014, Review of Economics and Statistics.

[72]  Sharing Mare Nostrum: An Analysis of Mediterranean Maritime History Articles in English-Language Journals. , 2015 .

[73]  David N. Figlio,et al.  Education Research and Administrative Data , 2015, SSRN Electronic Journal.