2,099 research outputs found
I Just Ran Four Million Regressions
In this paper I try to move away from the Extreme Bounds method of identifying" Instead of analyzing the" extreme bounds of the estimates of the coefficient of a particular variable distribution. My claim in this paper is that, if we do this, the picture emerging from the" empirical growth literature is not the pessimistic Robust" that we get with the" extreme bound analysis. Instead, we find that a substantial number of variables can be found" to be strongly related to growth.
Military spending and economic growth in China: a regime-switching analysis
This article has been made available through the Brunel Open Access Publishing Fund.This article investigates the impact of military spending changes on economic growth in China over the period 1953 to 2010. Using two-state Markov-switching specifications, the results suggest that the relationship between military spending changes and economic growth is state dependent. Specifically, the results show that military spending changes affect the economic growth negatively during a slower growth-higher variance state, while positively within a faster growth-lower variance one. It is also demonstrated that military spending changes contain information about the growth transition probabilities. As a policy tool, the results indicate that increases in military spending can be detrimental to growth during slower growth-higher growth volatility periods. © 2014 © 2014 The Author(s). Published by Taylor & Francis
Re-examining the consumption-wealth relationship : the role of model uncertainty
This paper discusses the consumption-wealth relationship. Following the recent influential workof Lettau and Ludvigson [e.g. Lettau and Ludvigson (2001), (2004)], we use data on consumption, assets andlabor income and a vector error correction framework. Key …ndings of their work are that consumption doesrespond to permanent changes in wealth in the expected manner, but that most changes in wealth are transitoryand have no e¤ect on consumption. We investigate the robustness of these results to model uncertainty andargue for the use of Bayesian model averaging. We …nd that there is model uncertainty with regards to thenumber of cointegrating vectors, the form of deterministic components, lag length and whether the cointegratingresiduals a¤ect consumption and income directly. Whether this uncertainty has important empirical implicationsdepends on the researcher's attitude towards the economic theory used by Lettau and Ludvigson. If we workwith their model, our findings are very similar to theirs. However, if we work with a broader set of models andlet the data speak, we obtain somewhat di¤erent results. In the latter case, we …nd that the exact magnitudeof the role of permanent shocks is hard to estimate precisely. Thus, although some support exists for the viewthat their role is small, we cannot rule out the possibility that they have a substantive role to play
Universal features in the growth dynamics of complex organizations
We analyze the fluctuations in the gross domestic product (GDP) of 152
countries for the period 1950--1992. We find that (i) the distribution of
annual growth rates for countries of a given GDP decays with ``fatter'' tails
than for a Gaussian, and (ii) the width of the distribution scales as a power
law of GDP with a scaling exponent . Both findings are in
surprising agreement with results on firm growth. These results are consistent
with the hypothesis that the evolution of organizations with complex structure
is governed by similar growth mechanisms.Comment: 4 pages, 7 ps figures, using Latex2e with epsf rotate and multicol
style files. Submitted to PR
Fiscal composition and long-term growth
We assess the fiscal composition–growth nexus, using a large country panel,
accounting for the usually encountered econometric pitfalls. Our results show that
revenues have no significant impact on growth whereas expenditures have negative
effects. The same is true for the OECD with the addition that government revenue
has a negative impact on growth. From our results, taxes on income are less for
growth enhancing, as well as public wages, interest payments, subsidies and
government consumption, while spending on education and health boosts growth.info:eu-repo/semantics/publishedVersio
Worker remittances and the global preconditions of ‘smart development’
With the growing environmental crisis affecting our globe, ideas to weigh economic or social progress by the ‘energy input’ necessary to achieve it are increasingly gaining acceptance. This question is intriguing and is being dealt with by a growing number of studies, focusing on the environmental price of human progress. Even more intriguing, however, is the question of which factors of social organization contribute to a responsible use of the resources of our planet to achieve a given social result (‘smart development’). In this essay, we present the first systematic study on how migration – or rather, more concretely, received worker remittances per GDP – helps the nations of our globe to enjoy social and economic progress at a relatively small environmental price. We look at the effects of migration on the balance sheets of societal accounting, based on the ‘ecological price’ of the combined performance of democracy, economic growth, gender equality, human development, research and development, and social cohesion. Feminism in power, economic freedom, population density, the UNDP education index as well as the receipt of worker remittances all significantly contribute towards a ‘smart overall development’, while high military expenditures and a high world economic openness are a bottleneck for ‘smart overall development’
High Dimensional Sparse Econometric Models: An Introduction
In this chapter we discuss conceptually high dimensional sparse econometric
models as well as estimation of these models using L1-penalization and
post-L1-penalization methods. Focusing on linear and nonparametric regression
frameworks, we discuss various econometric examples, present basic theoretical
results, and illustrate the concepts and methods with Monte Carlo simulations
and an empirical application. In the application, we examine and confirm the
empirical validity of the Solow-Swan model for international economic growth
Leading indicators of fiscal distress: evidence from extreme bounds analysis
Early warning systems (EWSs) are widely used to assess a country’s vulnerability to fiscal distress. A fiscal distress episode is identified as a period when government experiences extreme funding difficulties. Most EWSs employ a specific set of only fiscal leading indicators predetermined by the researchers, which casts doubt on their robustness. We revisit this issue using extreme bounds analysis, which allows identifying robust leading indicators of fiscal distress from a large set. A robust leading indicator’s effect does not strongly depend on the model specification. Consistent with the theoretical predictions of latest generation crisis models, we find that both fiscal and non-fiscal leading indicators are robust. In addition, we find that a fiscal vulnerability indicator based on fiscal and non-fiscal leading indicators offers a 29% gain in predictive power compared to a traditional one based only on fiscal leading indicators. This suggests that both fiscal and non-fiscal leading indicators should be taken into account when assessing country’s vulnerability to fiscal distress
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