{
  "title": "Institutions and Growth: a GMM/IV Panel VAR Approach",
  "publication": "IMF Working Papers, July 27, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/institutions-and-growth-a-gmm-iv-panel-var-approach-43128",
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  "summary": "Both sides of the institutions and growth debate have resorted largely to microeconometric techniques in testing hypotheses. In this paper, I build a panel structural vector autoregression (SVAR) model for a short panel of 119 countries over 10 years and find support for the institutions hypothesis.",
  "sections": [
    {
      "heading": "Methodology",
      "content": "- Builds a panel structural vector autoregression (SVAR) model for a short panel of 119 countries over 10 years.\n- Controls for individual fixed effects.\n- Uses a proxy for institutional quality; also tests a different proxy for institutional quality to check robustness.\n- Employs GMM/IV techniques within a Panel VAR framework (structural vector autoregression, vector autoregression)."
    },
    {
      "heading": "Main findings",
      "content": "- The analysis finds support for the institutions hypothesis.\n- Exogenous shocks to a proxy for institutional quality have a positive and statistically significant effect on GDP per capita.\n- On average, a 1 percent shock in institutional quality leads to a peak 1.7 percent increase in GDP per capita after six years.\n- Results are robust to using a different proxy for institutional quality."
    },
    {
      "heading": "Heterogeneity and dynamics",
      "content": "- There are different dynamics for advanced economies and developing countries.\n- The evidence suggests diminishing returns to institutional quality improvements."
    },
    {
      "heading": "Keywords and subjects (as listed)",
      "content": "- Econometric analysis, Estimation techniques, National accounts, Personal income, Structural vector autoregression, Vector autoregression.\n- Economic Development, EFW index, endogenous variable, estimation sample, expropriation index, index AJR, Institutions, Panel VAR, time series, WP.\n\nInstitutions and Growth: a GMM/IV Panel VAR Approach — Carlos Góes, IMF Working Paper No. 2015/174\n\n---\n\n Content in this bundle\n\n- Institutions and Growth: a GMM/IV Panel VAR Approach\n  - Institutions and Growth: a GMM/IV Panel VAR Approach (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Institutions and Growth: a GMM/IV Panel VAR Approach (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/institutions-and-growth-a-gmm-iv-panel-var-approach-43128"
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    "Authors: Carlos Góes",
    "Published: July 27, 2015",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513555508.001",
    "Builds a panel structural vector autoregression (SVAR) model for a short panel of 119 countries over 10 years.",
    "Controls for individual fixed effects.",
    "Uses a proxy for institutional quality; also tests a different proxy for institutional quality to check robustness.",
    "Employs GMM/IV techniques within a Panel VAR framework (structural vector autoregression, vector autoregression).",
    "The analysis finds support for the institutions hypothesis.",
    "Exogenous shocks to a proxy for institutional quality have a positive and statistically significant effect on GDP per capita.",
    "On average, a 1 percent shock in institutional quality leads to a peak 1.7 percent increase in GDP per capita after six years.",
    "Results are robust to using a different proxy for institutional quality.",
    "There are different dynamics for advanced economies and developing countries.",
    "The evidence suggests diminishing returns to institutional quality improvements.",
    "Econometric analysis, Estimation techniques, National accounts, Personal income, Structural vector autoregression, Vector autoregression.",
    "Economic Development, EFW index, endogenous variable, estimation sample, expropriation index, index AJR, Institutions, Panel VAR, time series, WP.",
    "**Institutions and Growth: a GMM/IV Panel VAR Approach**"
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