Convergence, Endogenous Growth, and Productivity Disturbances

Charles Leung and Danny Quah ()

No 1383, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Kelly (1992) has recently shown that evidence on convergence cannot be taken as evidence against endogenous growth in general. This study uses a well-known class of stochastic growth models to show other difficulties with traditional empirical studies of convergence. Key parameters typically cannot be estimated consistently in cross-section regressions. When the parameters are assumed known, implications for convergence are unavailable except under restrictive and economically unmotivated assumptions. Those same assumptions that relate key parameters to cross-country convergence render cross-section regressions impossible to estimate consistently.

Keywords: Cross-country Dependence; Cross-country Regression; Increasing Returns; Stochastic Growth; Time-series Regression (search for similar items in EconPapers)
JEL-codes: E32 O41 (search for similar items in EconPapers)
Date: 1996-04
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Citations: View citations in EconPapers (18)

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Related works:
Journal Article: Convergence, endogenous growth, and productivity disturbances (1996)
Working Paper: Convergence, Endogenous Growth, and Productivity Disturbances (1996)
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