Publication: Growth Empirics and Reality
Date
2001-05
ISSN
Published
2001-05
Author(s)
Brock, William A.
Durlauf, Steven N.
Abstract
This article questions current empirical
practice in the study of growth. It argues that much of the
modern empirical growth literature is based on assumptions
about regressors, residuals, and parameters that are
implausible from the perspective of both economic theory and
the historical experiences of the countries under study.
Many of these problems, it argues, are forms of violations
of an exchangeability assumption that implicitly underlies
standard growth exercises. The article shows that these
implausible assumptions can be relaxed 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 constitute draw from the same
statistical model. The article proposes ways to account for
both theory and heterogeneity uncertainty. Finally, using an
explicit decision-theoretic framework, the authors describe
how one can engage in policy-relevant empirical analysis.
Citation
“Brock, William A.; Durlauf, Steven N.. 2001. Growth Empirics and Reality. World Bank Economic Review. © Washington, DC: World Bank. http://hdl.handle.net/10986/17447 License: CC BY-NC-ND 3.0 IGO.”
Report Series
Other publications in this report series
Journal
Journal
World Bank Economic Review
1564-698X
Journal Volume
Journal Volume
Journal Issue
Journal Issue