Journal Article
Applying Growth Theory across Countries

Published
2001-05
Journal
World Bank Economic Review 15(2):283-288Author(s)
Metadata
Abstract
The potential problem of reverse causality has been obvious to everyone. It has usually been met with the standard econometric dodge: using lagged values of slow-moving variables as instruments. But this cannot be a serious solution to the problem. The causality issue points to a deeper question: Do cross-country regressions define a meaningful surface along which countries can move back and forth at will? If this is the idea, what mechanism could underlie such a surface? Brock and Durlauf call such a regression a 'model.' Reader suppose in a statistical sense it is. But an economic model should have some internal structure; its causal arrows should rest on some sort of behavioral mechanism, and that seems to be missing in this literature.Citation
“Solow, Robert M.. 2001. Applying Growth Theory across Countries. Washington, DC: World Bank. © World Bank. https://openknowledge.worldbank.org/handle/10986/17444 License: CC BY-NC-ND 3.0 IGO.”
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