We define a bivariate mixture model to test whether economic growth can be considered exogenous in the Solovian sense. For this purpose, the multivariate mixture approach proposed by Alfo and Trovato is applied to the Bernanke and Gurkaynak extension of the Solow model. We find that the explanatory power of the Solow growth model is enhanced, since growth rates are not statistically significantly associated with investment rates, when cross-country heterogeneity is considered. Moreover, no sign of convergence to a single equilibrium is found
Alfo, M., Trovato, G., Waldmann, R. (2008). Testing for country heterogeneity in growth models using a finite mixture approach. JOURNAL OF APPLIED ECONOMETRICS, 23(4), 487-514 [10.1002/jae.1008].
Testing for country heterogeneity in growth models using a finite mixture approach
TROVATO, GIOVANNI;WALDMANN, ROBERT
2008-01-01
Abstract
We define a bivariate mixture model to test whether economic growth can be considered exogenous in the Solovian sense. For this purpose, the multivariate mixture approach proposed by Alfo and Trovato is applied to the Bernanke and Gurkaynak extension of the Solow model. We find that the explanatory power of the Solow growth model is enhanced, since growth rates are not statistically significantly associated with investment rates, when cross-country heterogeneity is considered. Moreover, no sign of convergence to a single equilibrium is foundFile | Dimensione | Formato | |
---|---|---|---|
alfo_trovato_waldmann.pdf.pdf
accesso aperto
Dimensione
239.81 kB
Formato
Adobe PDF
|
239.81 kB | Adobe PDF | Visualizza/Apri |
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.