Solow, Robert M.2014-03-272014-03-272001-05World Bank Economic Reviewhttps://hdl.handle.net/10986/17444The 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.en-USCC BY-NC-ND 3.0 IGOAGGREGATE PRODUCTION FUNCTIONBASICBLACK MARKETBLACK MARKET PREMIUMBUSINESS CYCLESCAPITAL-LABORCAPITAL-LABOR RATIOCOMPONENTSCOMPUTER POWERCONSTANT RETURNSCONSTANT RETURNS TO SCALECOUNTRY REGRESSIONSCROSS-COUNTRY PANELCROSS-COUNTRY REGRESSIONCROSS-COUNTRY STUDIESDEMAND-SIDEDEVELOPING COUNTRIESDYNAMIC MODELECONOMIC GROWTHECONOMIC INCENTIVESECONOMIC POLICYECONOMIC RESEARCHECONOMIC REVIEWECONOMICSEMPIRICAL RESEARCHEMPIRICAL WORKENDOGENOUS GROWTHGROWTH PATHGROWTH RATEGROWTH REGRESSIONGROWTH REGRESSIONSGROWTH THEORYINDUSTRIAL ECONOMYINEQUALITYINSTRUMENTAL RATIONALITYLAGGED VALUESMARKET ECONOMYNATIONAL ECONOMYNATIONAL INCOMENEW TECHNOLOGYOBSERVED GROWTHOUTPUT GROWTHPLANNED ECONOMYPOLICY RESEARCHPOOR COUNTRIESPOTENTIAL OUTPUTPRIMARY PRODUCERSPRODUCTION FUNCTIONPRODUCTION FUNCTIONSRESOURCE ALLOCATIONSTICKY PRICESTECHNICAL PROGRESSTECHNOLOGICAL CHANGETECHNOLOGICAL KNOWLEDGETFPTOTAL FACTOR PRODUCTIVITYJournal ArticleWorld Bank10.1596/17444