The endogeneity of the natural rate of growth: An alternative approach

Acikgöz Senay and Merter Mert

No 2015-2, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This study estimates and tests the endogeneity of the natural rate of growth using the balance-of-payments consistent rate of growth (BPCRG) instead of the actual rate of growth. Our approach is also theoretically compatible with the one proposed by Thirlwall (2001). Following this idea, we first calculated the BPCRG and then tested the Thirlwall's Law for the U.S. economy. We then proceeded to test the endogeneity using the BPCRG. Empirical results we obtained support Thirlwall's Law and endogeneity.

Keywords: economic growth; Thirlwall's Law; the endogeneity of the natural rate of growth; the bounds testing approach; ARDL; FM-OLS (search for similar items in EconPapers)
JEL-codes: C22 E10 E23 O40 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-gro and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://www.econstor.eu/bitstream/10419/106142/1/815348266.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:20152

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