We Just Averaged over Two Trillion Cross-Country Growth Regressions
Electronic Access:
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Summary:
We investigate the issue of model uncertainty in cross-country growth regressions using Bayesian model averaging (BMA). We find that the posterior probability is distributed among many models, suggesting the superiority of BMA over any single model. Out-of-sample predictive results support that claim. In contrast with Levine and Renelt (1992), our results broadly support the more “optimistic” conclusion of Sala-i-Martin (1997b), namely, that some variables are important regressors for explaining cross-country growth patterns. However, the variables we identify as most useful for growth regression differ substantially from Sala-i-Martin’s results.
Series:
Working Paper No. 1999/101
Subject:
Bayesian models Education Exchange rates Health Informal economy
English
Publication Date:
July 1, 1999
ISBN/ISSN:
9781451852493/1018-5941
Stock No:
WPIEA1011999
Pages:
20
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