We Just Averaged over Two Trillion Cross-Country Growth Regressions

Author/Editor:

Mark F. J. Steel ; Eduardo Ley

Publication Date:

July 1, 1999

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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. 99/101

English

Publication Date:

July 1, 1999

ISBN/ISSN:

9781451852493/1018-5941

Stock No:

WPIEA1011999

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

20

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