Growth Empirics Under Model Uncertainty: Is Africa Different?

Charalambos Tsangarides

No 2005/018, IMF Working Papers from International Monetary Fund

Abstract: This paper attempts to identify robust patterns of cross-country growth behavior in the world as a whole and Africa. It employs a novel methodology that incorporates a dynamic panel estimator, and Bayesian Model Averaging to explicitly account for model uncertainty. The findings indicate that: (i) in addition to initial conditions, various economic factors such as higher investment, lower inflation, lower government consumption, better fiscal stance, improved political environment, exogenous terms-of-trade shocks, and fixed geographical factors are robustly correlated with growth; (ii) what is good for growth around the world is, in principle, also good for growth in Africa; and (iii) political and institutional variables are particularly important in explaining African growth.

Keywords: WP; Economic growth; growth regressions; Bayesian model averaging; dynamic panel estimation; physical capital; Africa sample; repayment ability; growth determinant; land market; panel data systems GMM estimator; civil war; country's authorities; Income; Government consumption; Debt service; Population growth; Africa (search for similar items in EconPapers)
Pages: 33
Date: 2005-01-01
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Citations: View citations in EconPapers (17)

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