Caselli, Francesco 
ORCID: 0009-0001-5191-7156, Esquivel, Gerardo and Lefort, Fernando
(1996)
Reopening the convergence debate: a new look at cross-country growth empirics.
Journal of Economic Growth, 1 (3).
363 - 389.
ISSN 1381-4338
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.
| Item Type: | Article |
|---|---|
| Official URL: | https://link.springer.com/journal/10887 |
| Additional Information: | © 1996 Kluwer Academic Publishers |
| Divisions: | Centre for Economic Performance Economics |
| Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor |
| JEL classification: | O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output (Income) Convergence O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models |
| Date Deposited: | 29 Mar 2008 12:28 |
| Last Modified: | 11 Dec 2024 22:04 |
| URI: | http://eprints.lse.ac.uk/id/eprint/3949 |
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