Growth Empirics and Reality

By William A. Brock, Steven N. Durlauf. 2001

572 citations recorded by the source corpus.

This article questions current empirical practice in the study of growth. It argues that much of the modern empirical growth literature is based on assumptions about regressors, residuals, and parameters that are implausible from the perspective of both economic theory and the historical experiences of the countries under study. Many of these problems, it argues, are forms of violations of an exchangeability assumption that implicitly underlies standard growth exercises. The article shows that these implausible assumptions can be relaxed by allowing for uncertainty in model specification. Model uncertainty consists of two types: theory uncertainty, which relates to which growth determinants should be included in a model; and heterogeneity uncertainty, which relates to which observations in a data set constitute draw from the same statistical model. The article proposes ways to account for both theory and heterogeneity uncertainty. Finally, using an explicit decision-theoretic framework, the authors describe how one can engage in policy-relevant empirical analysis.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/aeff509564ec2c18c73800d3495eeea2c085961d

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Sociology and Political Science

Citations in the corpus

Rising Income Inequality: Technology, or Trade and Financial Globalization? (2008, unknown): “…robustness analysis reports some results from between-estimator regressions, it is important to note that such strategy is subject to the problem Brock and Durlauf (2001) called the “open-endedness” of the regression specification, and the resulting omitted variable problem that can be as…”
A comparison of two model averaging techniques with an application to growth empirics (2010, methodology): “(2001a) and Brock and Durlauf (2001). BMA is flexible with respect to the size and exact specification of a model and it does not require the a priori selection of any model. Inference is based on a weighted average over all models. The idea of Bayesian averaging of classical estimates was first pro”
Identification of Social Interactions (2011, background): “While this was originally recognized in Brock and Durlauf (2001b), de Paula and Tang develop the argument. Further, de Paula and Tang argue that multiple equilibria can hold when J( x) is negative. Their identification argument differs from our previous arguments on how multiple equilibria facilitat”
Institutions and Economic Performance: Endogeneity and Parameter Heterogeneity (2009, unknown): “Following Brock and Durlauf (2001) the coefficients on institutions in regressions (XI) and (XIII) are composite coefficient estimates and standard errors for I ♦ + I ♦ D .”
State and Development: The Need for a Reappraisal of the Current Literature† (2016, unknown): “As Durlauf (2005) and Brock and Durlauf (2001) indicate, the democracygrowth relation in these regressions is not robust, the identification strategies are not credible, and different papers in the literature have different results because of different choices of control variables and other forms…”
On the Effect of Prior Assumptions in Bayesian Model Averaging with Applications to Growth Regression (2007, unknown): “Insightful discussions of model uncertainty in growth regressions can be found in Brock and Durlauf (2001) and Brock, Durlauf and West (2003). Various approaches to deal with this model uncertainty have appeared in the literature, starting with the extreme-bounds analysis in Levine and Renelt (1992)”
Does Education Matter for Economic Growth? (2014, unknown): “[10] Brock, W.”
Measuring ethnic fractionalization in Africa (2004, background): “…include a measure of ethnic diversity in their cross-country growth regressions (e.g., Alesina, Devleeschauwer, Easterly, Kurlat, and Wacziarg 2003; Brock and Durlauf 2001; Collier and Gunning 1999; Easterly 2002; Englebert 2000; Hall and Jones 1999; and Rodrik 1999).1 Until recently, nearly…”
Political Versus Economic Institutions in the Growth Process (2014, methodology): “Desdoigts (1999) explores a method based on the growth trajectory followed by countries, Brock and Durlauf (2001) use the variable coefficients model, Canova (2004) proposes a technique based on the predictive density of the data, while Sturm and De Haan (2005) use robust estimators.”
Least Squares Model Averaging (2007, unknown): “The solution (12) minimizes (13) subject to the nonnegativity and summation constraints (6).”
SYMMETRY OF EVIDENCE WITHOUT EVIDENCE OF SYMMETRY (2010, background): “Brock and Durlaufs [5] critique of the empirical growth literature is in part expressed as a critique of the assumption of (a conditional or partial form of) exchangeability.”
On the Empirics of Social Capital (2002, unknown): “Growth regressions of the type found in the studies of Table 3 have been subjected to very serious methodological criticisms; examples include Brock and Durlauf (2001b), Durlauf (2000), Durlauf and Quah (1999), and Temple (2000).”