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Testing the augmented Solow Model

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  • Jonathan Temple

Abstract

This paper examines the adequacy of the augmented Solow model for explaining international variation in the standard of living and growth rates. Robust estimation and measurement error diagnostics are used to assess the model in a variety of dimensions. The main findings are that the speed of conditional convergence is highly uncertain, that technology parameters obtained from the augmented Solow model cannot be trusted, and that the model does not work well when attention is restricted to either the OECD or developing countries. Not only that, the equation for steady state human capital is rejected by the data.

Suggested Citation

  • Jonathan Temple, 1995. "Testing the augmented Solow Model," Economics Papers 18 & 106., Economics Group, Nuffield College, University of Oxford.
    • Handle: RePEc:nuf:econwp:0018
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    File URL: http://www.nuff.ox.ac.uk/economics_wp/w18/testsol.zip
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    More about this item

    Keywords

    growth; development; convergence; human capital;
    All these keywords.

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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