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Determinants of long-term growth: a Bayesian Averaging of Classical Estimates (BACE) approach (2003)
| Citations: | 373 - 3 self |
BibTeX
@MISC{Sala-i-Martin03determinantsof,
author = {Xavier Sala-i-Martin and Gernot Doppelhofer and Ronald I. Miller},
title = {Determinants of long-term growth: a Bayesian Averaging of Classical Estimates (BACE) approach },
year = {2003}
}
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Abstract
This paper examines the robustness and joint interaction of explanatory variables in cross-country economic growth regressions. It employs a novel approach, Bayesian Averaging of Classical Estimates (BACE), which constructs estimates as a weighted average of OLS estimates for every possible combination of included variables. The weights applied to individual regressions are justified on Bayesian grounds in a way similar to the well-known Schwarz model selection criterion. Of 67 explanatory variables we find 18 to be robustly partially correlated with long-term growth and another three variables to be marginally related. Of all the variables considered, the strongest evidence is for the relative price of investment, primary school enrollment and the initial level of real GDP per capita.
Keyphrases
explanatory variable bayesian averaging cross-country economic growth regression long-term growth bayesian ground individual regression weighted average initial level possible combination ols estimate classical estimate included variable novel approach well-known schwarz model selection criterion relative price joint interaction primary school enrolment real gdp
