NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Growth Economics and Reality

William A. Brock, Steven N.Durlauf

NBER Working Paper No. 8041
Issued in December 2000
NBER Program(s):   EFG

This paper questions current empirical practice in the study of growth. We argue that much of the modern empirical growth literature is based on assumptions concerning regressors, residuals, and parameters which are implausible both from the perspective of economic theory as well as from the perspective of the historical experiences of the countries under study. A number of these problems are argued to be forms of violations of an exchangeability assumption which underlies standard growth exercises. We show that relaxation of these implausible assumptions can be done by allowing for uncertainty in model specification. Model uncertainty consists of two types: theory uncertainty, which relates to which growth determinants should be included in a model, and heterogeneity uncertainty, which relates to which observations in a data set comprise draws from the same statistical model. We propose ways to account for both theory and heterogeneity uncertainty. Finally, using an explicit decision-theoretic framework, we describe how one can engage in policy-relevant empirical analysis.

download in pdf format
   (472 K)

email paper

This paper is available as PDF (472 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8041

Users who downloaded this paper also downloaded these:
Klenow and Rodriguez-Clare The Neoclassical Revival in Growth Economics: Has It Gone Too Far?
Durlauf and Quah w6422 The New Empirics of Economic Growth
Rodriguez and Rodrik Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence
Brock and Taylor w10854 Economic Growth and the Environment: A Review of Theory and Empirics
Doppelhofer, Miller, and Sala-i-Martin w7750 Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us