Decomposing The Conditional Variance of Cross-Country Output

Shahram Amini, Michele Battisti and Christopher Parmeter
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Shahram Amini: Department of Economics, Virginia Polytechnic Institute and State University

No 2011-18, Working Papers from University of Miami, Department of Economics

Abstract: A well established fact in the growth empirics literature is the increasing variation in output per capita across countries. This phenomena however does not adequately describe changes in the distribution of output since it does not account for changes in the covariates which undoubtedly in influence per capita output levels. We propose a robust, nonparametric decomposition of the conditional variation of per capita output and find that OECD countries have experienced diminishing conditional variation while other regions have experienced increasing conditional variation. Our decomposition suggests that most of these changes in the conditional variance of output is due to unobserved factors not accounted for by the traditional growth determinants. In addition to this we show as these factors played very different roles over time and across regions.

Keywords: Generalized Kernel; Nonparametric; Conditional Variation (search for similar items in EconPapers)
JEL-codes: C14 G0 O47 O50 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-12-24
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Persistent link: https://EconPapers.repec.org/RePEc:mia:wpaper:2011-18

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