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The endogeneity of the natural rate of growth - an empirical study for Latin-American countries

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  • Lena Vogel

Abstract

The aim of this paper is to analyse the sensitivity of the natural rate of growth to the actual rate of growth for a sample of 11 Latin-American countries, assuming the natural rate to be determined endogenously by changes in the actual rate of growth. The natural rates of growth are estimated in a system of SUR estimations over the period 1986-2003. In order to determine whether they react endogenously to changes in the actual rate of growth, a dummy variable for boom periods is added to the system of regressions. The results confirm the hypothesis about the endogeneity of the natural rate of growth.

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  • Lena Vogel, 2009. "The endogeneity of the natural rate of growth - an empirical study for Latin-American countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(1), pages 41-53.
    • Handle: RePEc:taf:irapec:v:23:y:2009:i:1:p:41-53
    DOI: 10.1080/02692170802496869
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    Cited by:

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    2. Ofria, Ferdinando & Millemaci, Emanuele, 2010. "Kaldor-Verdoorn’s law and increasing returns to scale: a comparison across developed countries," MPRA Paper 30941, University Library of Munich, Germany.
    3. Kevin S. Nell & A.P. Thirlwall, 2017. "Why does the productivity of investment vary across countries?," PSL Quarterly Review, Economia civile, vol. 70(282), pages 213-245.
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    5. Sasaki, Hiroaki, 2010. "Endogenous technological change, income distribution, and unemployment with inter-class conflict," Structural Change and Economic Dynamics, Elsevier, vol. 21(2), pages 123-134, May.
    6. Guilherme R. Magacho & Danilo Spinola, 2024. "Supply and Demand in Kaldorian Growth Models: A Proposal for Dynamic Adjustment," Review of Political Economy, Taylor & Francis Journals, vol. 36(4), pages 1613-1634, October.
    7. José Carrión Pesantez & Diego Ochoa-Jiménez, 2018. "Endogeneity of the natural rate of economic growth in Ecuador: 1970-2014," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 43(45), pages 49-71, January-J.
    8. Matteo Lanzafame, 2014. "The balance of payments-constrained growth rate and the natural rate of growth: new empirical evidence," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 38(4), pages 817-838.
    9. Guilherme R. Magacho & John S. L. McCombie, 2020. "Structural change and cumulative causation: A Kaldorian approach," Metroeconomica, Wiley Blackwell, vol. 71(3), pages 633-660, July.
    10. A. P. Thirlwall, 2013. "Economic Growth in an Open Developing Economy," Books, Edward Elgar Publishing, number 15208.
    11. Senay Acikgoz & Merter Mert, 2010. "The Endogeneity of the Natural Rate of Growth: An Application to Turkey," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 57(4), pages 447-469, December.
    12. Sasaki, Hiroaki, 2012. "Is the long-run equilibrium wage-led or profit-led? A Kaleckian approach," Structural Change and Economic Dynamics, Elsevier, vol. 23(3), pages 231-244.
    13. A.P. Thirlwall, 2018. "Una vita nell’economia," Moneta e Credito, Economia civile, vol. 71(283), pages 179-210.
    14. Miguel A. León-Ledesma & Matteo Lanzafame, 2010. "The Endogenous Nature of the ‘Natural’ Rate of Growth," Chapters, in: Mark Setterfield (ed.), Handbook of Alternative Theories of Economic Growth, chapter 10, Edward Elgar Publishing.
    15. Kevin S. Nell & A.P. Thirlwall, 2017. "Perche' la produttivita' degli investimenti varia tra paesi? (Why does the productivity of investment vary across countries?)," Moneta e Credito, Economia civile, vol. 70(279), pages 197-231.
    16. Molerés-Regalado, Estefanía. & Perrotini-Hernández, Ignacio., 2013. "On Harrod’s Natural Rate of Growth and the Role of Demand: an Empirical Assessment," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(16), pages 29-49, primer se.
    17. Fortuno-Hernández, Josefa Carolina. & Landa-Díaz, Heri Óscar., 2014. "Gasto público, inversión y crecimiento en México , 1980-2014," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(19), pages 33-52, segundo s.
    18. Senay, Acikgöz & Mert, Merter, 2015. "The endogeneity of the natural rate of growth: An alternative approach," Economics Discussion Papers 2015-2, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    natural rate of growth; actual rate of growth; endogeneity; Latin America; seemingly unrelated regressions;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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