Global Divergence in Growth Regressions

Joseph Zeira, Gianfranco Di Vaio (gdivaio@luiss.it) and Michele Battisti

No 9687, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper extends the standard growth regression model by adding an assumption that a country follows the global technology frontier either fully or partially. This additional assumption changes significantly the growth regression model and its results in three main ways. First, it shows that although a country converges to its long-run growth path, this path can diverge from the countries at the global frontier. We measure the degree of divergence for each country and find that most indeed diverge from the frontier. Second, we estimate growth dynamics without controlling for additional variables. Third, our new method enables us to disentangle the effects of the explanatory variables on the long-run rate of growth from the short-run effects.

Keywords: Convergence; Divergence; Economic growth; Global frontier; Growth regressions (search for similar items in EconPapers)
JEL-codes: O40 O47 O57 (search for similar items in EconPapers)
Date: 2013-10
New Economics Papers: this item is included in nep-fdg and nep-gro
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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