Determinants of Growth in an Error: Correction Model for El Salvador

Armando Méndez Morales

No 1998/104, IMF Working Papers from International Monetary Fund

Abstract: An error-correction model identifies determinants of growth consistent with results from panel regressions based on a standard Cobb-Douglas production function for El Salvador for 1970-1995, with structural factors affecting the technology variable and macroeconomics and expectations explaining the deviations from the long-run trend. Consistency of the parameters is satisfactory, especially considering that half of the sample period was affected by a civil war, 40 percent of the working population migrated to foreign countries during that period, and the rapid process of economic reform after the advent of peace resulted in overlapping structural patterns.

Keywords: WP; log; capital stock; exchange rate; Econometrics; Growth; physical capital; per-capita GDP growth; total factor productivity growth; Cobb-Douglas production function; constant returns to scale; labor productivity growth; capital destruction; equation decline; Total factor productivity; Real effective exchange rates; Labor force; Central America (search for similar items in EconPapers)
Pages: 28
Date: 1998-07-01
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Citations: View citations in EconPapers (8)

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