Operationalizing growth models

Lucio Baccaro () and Sinisa Hadziabdic ()
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Lucio Baccaro: Max Planck Institute for the Study of Societies
Sinisa Hadziabdic: Max Planck Institute for the Study of Societies

Quality & Quantity: International Journal of Methodology, 2024, vol. 58, issue 2, No 16, 1325-1360

Abstract: Abstract We introduce a novel approach to operationalizing growth models. Drawing on the most recent release of OECD Input–Output Tables, we compute the import-adjusted growth contributions of consumption, investment, government expenditures, and exports for sixty-six countries in the years 1995–2007 and 2009–2018, covering not only advanced Western economies but also Central and Eastern European, South-East Asian, and Latin American countries. We find that most are export-led or domestic demand-led and other forms of growth are rare. Our results differ from other classifications in that they reveal important geographical variation as well as temporal change. In a subsequent step, we illustrate the utility of the methodology by investigating the link between real exchange rate devaluation and export-led growth, a contentious issue in the existing literature. For pre-crisis advanced Western economies, we find an association between the two variables, which is statistically significant only when our new indicator is used.

Keywords: Growth models; Political economy; Input–output tables; Export-led growth; Advanced economies; Emerging economies (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11135-023-01685-w

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