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Cleaning Up the Kitchen Sink: Growth Empirics When the World Is Not Simple

Author

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  • Francisco Rodríguez

    (Department of Economics, Wesleyan University)

Abstract

This paper explores the relevance of unknown nonlinearities for growth empirics. Recent theoretical contributions and case-study evidence suggest that nonlinearities are pervasive in the growth process. I show that the postwar data provide strong evidence in favor of generalized non-linearities. I provide two alternative mechanisms for making inference about the effects of production-function shifters on growth that do not make a priori assumptions about functional form: monotonicity tests and average derivative estimation. The results of these tests point towards a greater role for structural variables and a smaller role for policy variables than the linear model.

Suggested Citation

  • Francisco Rodríguez, 2006. "Cleaning Up the Kitchen Sink: Growth Empirics When the World Is Not Simple," Wesleyan Economics Working Papers 2006-004, Wesleyan University, Department of Economics, revised 17 May 2007.
    • Handle: RePEc:wes:weswpa:2006-004
    Note: Earlier version "Cleaning Up the Kitchen Sink: On the Consequences of the Linearity Assumption for Cross-Country Growth Empirics" available at http://repec.wesleyan.edu/pdf/frrodriguez/2006004a_rodriguez.pdf
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    File URL: http://repec.wesleyan.edu/pdf/frrodriguez/2006004_rodriguez.pdf
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    Citations

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    Cited by:

    1. Ricardo Hausmann, 2008. "The Other Hand: High Bandwidth Development Policy," CID Working Papers 179, Center for International Development at Harvard University.
    2. William F. Maloney & Daniel Lederman, 2008. "In search of the Missing Resource Curse," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2008), pages 1-57, August.
    3. Dunning, Thad & Shelton, Cameron A., 2008. "Comments," LSE Research Online Documents on Economics 123112, London School of Economics and Political Science, LSE Library.
    4. Michael Binder & Georgios Georgiadis, 2010. "Determinants of Human Development: Insights from State-Dependent Panel Models," Human Development Research Papers (2009 to present) HDRP-2010-24, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    5. Wang, Zhi & Wei, Shang-Jin & Wong, Anna, 2010. "Does a Leapfrogging Growth Strategy Raise Growth Rate? Some International Evidence," Working Papers on Regional Economic Integration 47, Asian Development Bank.
    6. Andrew Sharpe & Alexander Murray, 2011. "State of the Evidence on Health as a Determinant of Productivity," CSLS Research Reports 2011-04, Centre for the Study of Living Standards.
    7. Rafaela PIZARRO-BARCELÓ & Angel GARCIA-ORTIZ, 2010. "Banking and Monetary Transmission Mechanism in Morocco," EcoMod2010 259600135, EcoMod.
    8. Alan Martina, 2007. "A Class of Poverty Traps: A Theory and Empirical Tests," ANU Working Papers in Economics and Econometrics 2007-482, Australian National University, College of Business and Economics, School of Economics.

    More about this item

    Keywords

    Economic Growth; Cross-Country Growth Regressions; Non-linearities; Non-parametric econometrics;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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