Growth Accounting and Regressions:new approach and results

Tiago Sequeira and Hugo Morão

No 2020/0113, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: We seek for determinants of the sources of growth. Using a growth accounting method that accounts for time variations in factor shares, we run growth regressions for a panel of 101 countries between 1950 and 2015. Our methodology takes into account the specific features of the data (namely outliers, heterogeneity, and cross panel correlations) and overcomes most criticisms previously raised on growth regressions. The most important evidence reveals that government current expenditure decreases the factor shhares and has no effect on total factor productivity (TFP). Trade affects the TFP and the Biased Technical Chance (BTC) components, decreasing the factor shares. Moreover, human capital decreases TFP and increases the BTC contribution to growth. This unveils the channels through wchich determinants of growth act in influencing economic growth.

Keywords: Economic Growth; Growth Accounting; Growth Regressions; Time-varying shares; Government Expenditure; Robust estimation; Bootstrap (search for similar items in EconPapers)
JEL-codes: O47 O50 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-eff and nep-gro
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Related works:
Journal Article: Growth accounting and regressions: New approach and results (2020)
Journal Article: Growth accounting and regressions: New approach and results (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp01132020

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