Brock, William A.Durlauf, Steven N.2014-03-272014-03-272001-05World Bank Economic Reviewhttps://hdl.handle.net/10986/17447This 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.en-USCC BY-NC-ND 3.0 IGOAUTOREGRESSIVE MOVING AVERAGEAVERAGE PROCESSBAYES FACTORBAYESIAN STATISTICSBENCHMARKBOOTSTRAPBUSINESS CYCLECALCULATIONCIVIL LIBERTIESCOMPUTATIONCOUNTRY DATACOUNTRY REGRESSIONSCOVARIANCECROSS-COUNTRY DATACROSS-COUNTRY DIFFERENCESCROSS-COUNTRY REGRESSIONDATA ANALYSISDATA SETDATA SETSDECISION MAKINGDECISION THEORYDEMOCRATIC INSTITUTIONSDETERMINANTS OF GROWTHDISTRIBUTION FUNCTIONDISTRIBUTIONAL DYNAMICSECONOMETRIC ANALYSISECONOMETRIC ISSUESECONOMETRICSECONOMIC GROWTHECONOMIC HISTORYECONOMIC REVIEWECONOMIC STRUCTUREECONOMIC SYSTEMSECONOMIC THEORYECONOMICSECONOMICS LITERATUREEMPIRICAL ANALYSISEMPIRICAL GROWTH LITERATUREEMPIRICAL GROWTH REGRESSIONSEMPIRICAL LITERATUREEMPIRICAL METHODSEMPIRICAL RESEARCHEMPIRICAL WORKENDOGENOUS GROWTHEQUATIONSERROR TERMEXOGENOUS VARIABLESEXPECTED UTILITYEXPECTED VALUEEXPECTED VALUESEXPERIMENTAL ECONOMICSFIXED EFFECTSFREE MARKETSFUNCTIONAL FORMGOODNESS OF FITGROWTH ANALYSISGROWTH CONTEXTGROWTH DATAGROWTH DETERMINANTSGROWTH DYNAMICSGROWTH EMPIRICSGROWTH EQUATIONGROWTH MODELGROWTH MODELSGROWTH PERFORMANCEGROWTH POLICIESGROWTH PROCESSGROWTH RATEGROWTH RATESGROWTH REGRESSIONGROWTH REGRESSIONSGROWTH RESIDUALSGROWTH THEORYHETEROSKEDASTICITYHUMAN CAPITALHYPOTHESESINDIVIDUAL COUNTRIESINEQUALITYINSTRUMENTAL VARIABLESLINEAR MODELLINEAR MODELSLINEAR REGRESSIONLONG RUNMACROECONOMIC POLICYMACROECONOMICSMATRIXMAXIMUM LIKELIHOOD ESTIMATIONMEASUREMENT ERRORMICROECONOMIC DATA SETSMILITARY EXPENDITURESMINIMIZATIONMISSING OBSERVATIONSMODEL OF GROWTHNEW GROWTH THEORIESORTHOGONALITYOUTLIERSPER CAPITA GROWTHPER CAPITA INCOMEPOLICY ANALYSISPOLICY CHANGEPOLICY INSTRUMENTPOLICY INTERVENTIONPOLICY VARIABLESPOLITICAL INSTABILITYPOLITICAL RIGHTSPOLITICAL STABILITYPOLITICAL SYSTEMSPOOR COUNTRIESPOOR DATAPOOR MEASURESPOPULATION GROWTHPOVERTY TRAPSPREDICTIONPREDICTIONSPROBABILITIESPROBABILITYPROBABILITY THEORYPRODUCTION FUNCTIONPROPERTY RIGHTSRANDOM VARIABLESREGRESSION ANALYSESRISK AVERSIONSOCIAL CAPITALSTANDARD DEVIATIONSTANDARD ERRORSSTATISTICAL ANALYSESSTATISTICAL ANALYSISSTATISTICAL INFERENCESTATISTICAL METHODSSTATISTICAL MODELSSTATISTICAL SIGNIFICANCESTATISTICAL THEORYSTATISTICIANSTHEOREMSTRADE OPENNESSTRADE POLICYUTILITY FUNCTIONUTILITY FUNCTIONSUTILITY THEORYUTILITY VALUEVALIDITYJournal ArticleWorld Bank10.1596/17447