Has the Lucas Paradox been fully explained?

Céline Azémar and Rodolphe Desbordes

Economics Letters, 2013, vol. 121, issue 2, 183-187

Abstract: Alfaro, Kalemli-Ozcan, and Volosovych (2008) argue that accounting for differences in institutional quality makes the Lucas Paradox disappear. We show that their key finding is driven by the presence of outliers. Once we control for them, we find that the Lucas Paradox remains.

Keywords: Capital flows; Institutional quality; Lucas Paradox; Outliers (search for similar items in EconPapers)
JEL-codes: F21 O43 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:121:y:2013:i:2:p:183-187

DOI: 10.1016/j.econlet.2013.07.025

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