Modeling parameter heterogeneity in cross-country regression models

Andros Kourtellos ()

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: We employ various local generalizations of the Solow growth model that model parameter heterogeneity using human development at the beginning of the period with adult literacy rates and life expectancy at birth as a proxy. The model takes the form of a semiparametric varying coefficient model along the lines of Hastie and Tibshirani (1992). The empirical results show substantial parameter heterogeneity in the cross-country growth process, a finding that is consistent with the presence of multiple steady state equilibria and the emergence of convergence clubs.

Keywords: Solow growth model; parameter heterogeneity; varying coefficient model; human development (search for similar items in EconPapers)
Pages: 25 pages
Date: 2011-07
New Economics Papers: this item is included in nep-fdg
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:11-2011

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