Accounting for the Service Sector Growth in the United States: An Econometric Study

Mohammed I. Ansari
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Mohammed I. Ansari: Associate Professor, College of Business, Albany State University, Albany, GA

Ekonomia, 2001, vol. 5, issue 2, 215-228

Abstract: The main purpose of this paper is to estimate an econometric model for explaining the service sector growth in the US. The paper draws upon existing literature on the subject for selecting the appropriate variables. In view of the latest development in time series analysis, unit root and cointegration tests are first applied to determine the time series characteristics of the data set. An econometric model consisting of a four variable equation is estimated employing in the standard regression techniques. Both Chow-test and recursive least squares method are employed to test the robustness of certain aspects of the results. The findings support the relevance of the secular trend, the Bacon-Eltis, and the Cambridge views to the US service sector growth. The policy implication is that the Us should continue its efforts towards a full liberalization of trade in services under the current WTO regime. This is clearly a better strategy than relying on restrictive trade practices or granting some subsidies to those industries which are losing comparative advantage.

JEL-codes: C22 F43 L80 O51 (search for similar items in EconPapers)
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:ekn:ekonom:v:5:y:2001:i:2:p:215-228

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