Why Run a Million Regressions? Endogenous Policy and Cross Country Growth Empirics

Günther Rehme

No 140, Darmstadt Discussion Papers in Economics from Darmstadt University of Technology, Department of Law and Economics

Abstract: This paper analyzes the link between growth and public policy when the latter depends on economically important fundamentals. When policy is endogenous the measured effects of policy on growth will generally be biased. Using a widely quoted theoretical model, the signs of the biases are derived. It is shown that the usually reported effects on growth of tax rate variables related to GDP, the ratio of public investment to total investment and the ratio of redistributive transfers to GDP are generally biased downwards. Based on these signed biases the paper discusses some empirical results that seem puzzling from a theoretical viewpoint.

Keywords: Growth; Public Policy; Cross-Sectional Models (search for similar items in EconPapers)
JEL-codes: C2 O4 (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/22523/1/ddpie_140.pdf (application/pdf)

Related works:
Journal Article: Why Run a Million Regressions? Endogenous Policy and Cross-Country Growth Empirics (2010)
Working Paper: Why Run a Million Regressions? Endogenous Policy and Cross-Country Growth Empirics (2010)
Working Paper: Why Run a Million Regressions? Endogenous Policy and Cross-Country Growth Empirics (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:darddp:dar_21579

Access Statistics for this paper

More papers in Darmstadt Discussion Papers in Economics from Darmstadt University of Technology, Department of Law and Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().